Follow the steps below to enter a change in ownership calculated with a weighted average on Form 1065.
How to enter a change in ownership calculated with a weighted average:
- Under the Input Return tab, select Partner Information.
- Select Partner Percentages.
- Enter the percentages for each partner in the Beginning and Ending columns. These should reflect the partner's ownership on the first day of the tax year and the last day of the tax year, respectively.
Follow these steps if the dates for the ownership changes are the same for all partners:
- Under Partner Information, select Change in Ownership.
- Select Alloc Override Dates.
- Enter the beginning and ending dates for each change in the Periods available. These dates must cover the entire tax year.
- For example, the partnership files a calendar-year return, and ownership changed at the end of June. For Period 1, enter a Beginning date of 1/1, and an Ending date of 6/30. For Period 2, enter a Beginning date of 7/1, and an Ending date of 12/31.
- Select Back to Partner.
- Select a partner using the available tabs.
- Enter the partner's Percentage (xx.xxxxxx) (-1=none) for each period selected in step 2. You don't need to re-enter the period dates on this screen.
- Repeat steps 4 and 5 for each partner.
Follow these steps if the dates for the ownership changes are different for all partners:
- Under the Input Return tab, select Change in Ownership.
- Under the Allocation Period Information section, enter the Beginning date and Ending date.
- In Percentage, enter the partner's profit-sharing percentage for each allocation period in xx.xxxxxx format. If the percentage is zero for any period, enter -1. If the percentage is 49%, enter 49.000000.
- Repeat steps 1–3 for all partners who changed or terminated profit-sharing during the tax year. If there's no change in ownership for a particular partner, no entries are needed for that partner.
The weighted average calculation will only apply to the profit-sharing percentage. Other items, such as capital accounts, may need to be specially allocated.