Accounting & Bookkeeping & Small Business Forum

Guest · Posted: Wed Oct 01, 2003 6:04 am Post subject: First Complicated Issue

I have a new client in a partnership with 3 other investors. They (the group) purchased a franchise at the end of 2002, incorporated their business and have a DBA because of the franchise. They have classified their workers (3) as independent contractors and will send them 1099s at the end of the year. The client gave me folders with receipts for start-up expenses, bank statements, and slips of paper with figures written on them. I am not 100% sure how to start their books because I've never dealt with a partnership or corporation. Also, just for my information, would they file their taxes as a corporation or partnership or would each investor file taxes individually.

Guest · Posted: Wed Oct 01, 2003 11:54 am Post subject: RE: First Complicated Issue

Hey, first you have to find out if they are just general partnership. If this is the case imagine that they are sole prop but instead of being one person they are 3 persons.
There is a 1065 to file and each person will attach a K1 schedule in their 1040. each person will claim the income based on their shares in this partnership. I am also having a new client who is partnership and this is what I have learned so far but I still don’t know if the 1065 should be filed by itself before april 15 and then schedule k-1 with their 1040?? If someone can clarify the timeline I will appreciate

Guest · Posted: Fri Oct 10, 2003 10:36 am Post subject: RE: First Complicated Issue

The 1065 is filed alone and includes the K-1. The individual K-1s are given to the individual partners and the information form the K-1s is used to file the personl returns. The k-1s don't need to be filed with the personal returns.

Go down to your local IRS office (or get on their web sites) and order the free publications they have to assist with all kinds of issues including filing 1065s, reporting partnership information on personal returns, etc. They really are quite good.

Guest · Posted: Thu Mar 25, 2004 8:30 am Post subject: RE: First Complicated Issue

The due date for a 1065 is April 15th. You attach the K1 with the 1065. Then you give a copy of the K1 to the partners. They include the K1 info on their 1040's but do not attach the K1 to the 1040. Just keep it for your records.