Partnership tech termination

[TAXMAN]

Partnership had a technical termination on 12-31-2015. The way I understand I would on form 1065 on line g check the #2 box and the #6 box. Since the new partnership would begin the next day 01-01-2016 I would not have the new return due until next year. This was a calander year partnership with 2 partners, no assets except cash (2100.00) at year end. Daughter-in-law bought father out on 12-31-2015. This is what the attorney instructed them to due to avoid having 2 short years. Partnership still doing the same kind of work as before no change there and no employees. Gross income has been about 40k for past 10 years with son being guaranteed salary(does 95% of the work) which has always left a little in the bank at year end. This arrangement will continue on. Am I ok on the fact that a new partnership filing will be due next year using the same FEIN? Do not want any of those nasty penalties for not filing. What are your thoughts? BTY I saw a copy of the check paid to father. It is dated 12-31-2015 and cleared bank on 01-04-2016.

[schirallicpa]

I'd get a new EIN.  

 

[jklcpa]

No, the partnership continues to file using the same EIN because the entity wasn't terminated, it continues to exist as a legal entity.  This was only a technical termination due to the amount of ownership interest that changed hands. 

The instructions from 1065 say that the proper reporting would be:

• On the final return involving the dad, check boxes G2 and G6 that indicate "final return" and "technical termination.
• On the subsequent return with the daughter-in-law as a partner, check boxes G1 and G6 that indicate "initial return" and "technical termination"