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  1. #1
    Join Date
    May 2019
    Posts
    1

    Default How to Change Ownership Percentage in a Partnership

    My question involves business law in the state of: New York

    My wife and I have a general partnership. I own 51% and she owns 49%. She will start doing most of the work in the business. What would it require to change her percentage to 99% and mine 1%? Thank you for any help you can give.

    Bill

  2. #2
    Join Date
    Oct 2014
    Posts
    7,199

    Default Re: Change in Partnership Percentage

    You may simply make a gift to her of 50% interest in the partnership (i.e. a gift of all but the 1% you wish to retain). A letter or memorandum documenting the gift will probably suffice. Gifts between spouses do not trigger any federal gift tax, so doing it as a gift should not present any tax issues for you. The records of the partnership will also need to reflect the change, and the change will need to be reported on the partnership's Form 1065 that it files with the IRS and the state partnership return as well.

  3. #3
    Join Date
    Oct 2006
    Posts
    15,266

    Default Re: Change in Partnership Percentage

    Quote Quoting Taxing Matters
    View Post
    You may simply make a gift to her of 50% interest in the partnership (i.e. a gift of all but the 1% you wish to retain). A letter or memorandum documenting the gift will probably suffice. Gifts between spouses do not trigger any federal gift tax, so doing it as a gift should not present any tax issues for you. The records of the partnership will also need to reflect the change, and the change will need to be reported on the partnership's Form 1065 that it files with the IRS and the state partnership return as well.
    Its also just a little bit less complicated, as far as taxes are concerned, to make the change to correspond with the start of a new tax year.

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