Accepted Answer

Hello again XXXXXXXX,

First, the tax id number you have should be one that was issued to you by the IRS and not by the state. It should be a 9 digit number that starts with the number 81. The first two digits of every federal ID number indicate the state, and 81 indicates MT. So the number you should be using should be 81-XXXXXXX

As a partnership, you will need to File Form 1065 with the IRS and Form PR-1 with the state of MT. These are informational returns only. No tax is paid with these forms. The partnership strictly provides information on these returns to show the income and expenses and profits or losses of the partnership.

The partnership then issues K-1 forms to each of the partners to report each partner's share of the profit or loss from the business. This K-1 form basically takes the place of a W-2 form that an employer would send to an employee, only it is much more detailed than a W-2 form. Each partner will then report his share of the profits or losses as shown on that K-1 form on his own personal tax return, and will pay taxes accordingly.

Your federal ID number (81-xxxxxxx) will be used on the Form 1065 that you file with the IRS and on the Form PR-1 that you file with the state of MT. That is your partnership's ID number.

The income or loss from the K-1 forms that will be issued to you and your father will then be reported on your own personal returns, and of course you will just use your SS number as you normally would on your personal tax returns.

If this was helpful please press the Accept button. Positive feedback is also appreciated.

Thank you XXXXXXXX.



Edited by Merlo on 9/18/2009 at 12:24 AM

Expert:	Merlo
Pos. Feedback:	99.8 %
Accepts:
Answered:	9/18/2009

Accountant

25+ years tax consulting. Specializing in returns for US citizens living abroad