qbteachmt
Level 15

"(On the S-Corp return in the tax software is a K-1 (1065) form. The prior preparer might have had this in the file by accident or something, don't know why. I should not have listed anything about this in my question.)"

Yes, you should. That is important information. An S Corp would send a K-1 from the 1120S. If you have a K-1 from a 1065, that is a Partnership return.

"2 guys made a S-Corp and a K1 was issued/received in 2015-2019."

But it seems they never filed as the S corp and kept filing as the 1065? You need to investigate further and get proof; don't rely on what they tell you.

"I was told the buyout was in 2016."

Then your client, as the seller, would not keep getting K-1 at all.

And selling one part of a 2-partner entity to the other partner means the partnership was dissolved. So, you don't need to find proof of anything for 2017-onward, because technically, your client is not a party to this other entity from the point of sale.

At least, that's what now appears to have happened.

 

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