Whose tax return are your preparing?

Lat's start with the person who got that W2, and who issued it to them. That person is the Employee of that business. This part doesn't go on a 1065; it reflects an employee position and is not issued to you from your own partnership. Or that was issued in error.

A W-2 is personal employment, which is why it is entered as part of the 1040. It has nothing to do with the rest of what you asked.

Then, tell us about that 1099. 1099-What? From whom and to whom and why?