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My husband and I owned a llc together and began a divorce in…

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My husband and I...

My husband and I owned a llc together and began a divorce in April 2016. I was court ordered out of the business in September of that year and court ordered not to remove profits. Our divorce became final in December of 2017 and he was awarded the business and all business liabilities as part of the marital asset distribution and I was given a small check not subject to state or federal taxes. He sent me a 1099 for 2016 and is trying to give me a K1 for both years for a large amount of money.

Accountant's Assistant: The Accountant will know how to help. Is there anything else important you think the Accountant should know?

Just need to know what I am liable for

Submitted: 26 days ago.Category: Tax
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Answered in 11 minutes by:
3/28/2018
Tax Professional: Lev, Tax Advisor replied 26 days ago
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 32,694
Experience: Taxes, Immigration, Labor Relations
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A single member LLC is a partnership - and a long as you are a partner - you are responsible for all income which partnership passed to partners.

The court order may not override that tax law provision.

The question here - WHEN you departed from the LLC - and your partnership interest was transferred to your spouse.

Up to this date - you are still responsible.

Please verify if the divorce decree specified that date?

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Customer reply replied 26 days ago
There was a temporary order prohibiting me from doing any business making any changes etc in September of 2016 but the final decree was dec 2017 which was also completely out of my control
Tax Professional: Lev, Tax Advisor replied 26 days ago

We are not talking about you to be in control - that is separate issue.

You might be not in control - but still may be a partner.

The question is - did the divorce decree - either temporary or final - specified that you should be departed as a partner?

If yes - what date was specified as a departure date?

If nothing was specified - you will be remained as a partner until both partner agreed to dissolve the partnership.

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Customer reply replied 26 days ago
Even the final decree does not state that the partnership is dissolved? But the business was awarded to him. I didn’t receive profits so have no way to pay taxes. What do I do?
Customer reply replied 26 days ago
I was also ordered to turn over all receipts, documents proof of expenses etc
Tax Professional: Lev, Tax Advisor replied 26 days ago

That might be a question to your attorney who prepared your divorce decree...

Then - we have an issue between partners - and you have to negotiate your departure.

So the partnership will be officially dissolved and you woudl get your FINAL k1 statement.

You will need to be clear - if possible to have that dissolution date in the past - so you will not be responsible for any income realized by the LLC after that date.

If you will not be able to negotiate with your partner (who happens to be your ex-spouse) - you may sue your partner - and let the court decide on all issues.

Unfortunately - the partnership is based on the agreement between partners.

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Tax Professional: Lev, Tax Advisor replied 25 days ago

I appreciate if you take a moment to rate the answer.

Experts are ONLY credited when answers are rated positively.

If you still have any doubts, need clarification - please be sure to ask.

I am here to help you with all Social Security / Tax related issues

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