Partnership Question

[samingeorgia]

I just completed a Form 1065-B for a partnership with over 200 partners. One of the partners had a 25% interest on January 1, 2010, but in June exchanged his partnership interest for another asset, so his end-of-year interest is zero percent.

I was under the impression that you would use a weighted average and allocate January through June loss to this guy, but the program shows zero as his loss. I do not see a way to use some kind of weighted average on the K-1 input.

Is that right? Does it make a difference that he divested himself of all his interest? Hypothetically -- what if he was a partner right up until December 30?

Thanks in advance for helping me reason this out.

[Gail in Virginia]

Your reasoning is fine. ON the Global Info tab for the Sch K-1, there is a heading for Weighted Average Percentages. If you check the box under this heading and put the date in, then I think you put the individual percentages for each partner between those dates on their input or detail form. I have not personally done any this way, but it looks like it would work. Good luck!

[samingeorgia]

The K-1 input for a 1065-B is not exactly like the input for a regular 1065. However, there is a column beside the columns for "end of year percentages" that I used for allocating the percentages. I took the ownership percentage and pro-rated the loss based on the number of days the partner held his interest. Looks OK to me, I just had to do it manually.