joshuabarksatlcs
Level 10

@dkh , Perhaps my brain is wired differently.  My thought was rather:

To get the help you need can you clarify...

1)  Who was upset?

2)  Why were you expecting rude comments? 

 

In my earlier post, I said: 

Key general point: As in any other tax area, make sure to have all the necessary information in reporting a transaction.

Before it was: They sold the business, a/P, A/r, and inventory.

This morning, this was added: Real Estate Sale, Retail grocery business.

So, here it is, from the Agatha-Christie-fan side of me:

Once upon a time, A and B formed a partnership AB Prominent Partners ABPP.  Annually ABPP filed Form 1065 and issued K-1's to A and B.

A and B were grocers and ran the grocery under a fictitious name A and B Great Grocers, ABGG, which was operated under the partnership ABPP.

A and B owned the building 50/50 in their names.  They used the building to operate the partnership ABPP that ran the Grocery business ABGG.

The business was sold.  The preparer for ABPP prepared the Form 1065 and put the installment sale (proceeds of $720K) on Schedule K, and the respective amounts were allocated to A and B on Schedule K-1's Line 20.   A (or B) provided the K-1 to @Brainstrom .  

Upon the sale, Form 1099s were issued to A and to B, for the "full amount" of $720K each.

At the same time, we just found out there was a sale of the building.

ASSUMING EVERYTHING (- except **partially** on Form 1065 - ) was prepared correctly by the third parties, here's my wild guess:

The sale was for $2.16 million.  $1.44 million for the building; $720K for the grocery business ABGG.  

$720K was A's 50% share of the building sale.  1099-S issued to A

$720K was B's 50% share of the building sale.   1099-S issued to B.

$720K was for the "A/R A/P Inventory and the business" of ABGG. 

The cash payment was $1.53 Million, allocated $510K to each of the above 1/3  shares.

ABPP's tax preparer properly included the 720K as sale proceeds got the installment sale  of the business ABGG on the partnership return for ABPP - but erroneously included it all (thus my comment of "**partially**" above") as installment sale and allocated the full amount to the partners A and B, on Line 20, Sch K-1, without (correctly) allocating to AR and inventory etc.

This would explain all the convoluted info. 

Totally my speculation: Because the amount for each 1/3 portion ($720K) was identical, @Brainstrom got the $720K's all mixed up,

Here comes the rudeness:

GET THE SALE AGREEMENT and READ IT!!!

 


I come here for kudos and IRonMaN's jokes.