What is the name of your state (only U.S. law)? Colorado
I own a very small business with 2 other people. We are all equal partners. Last year 1 of the partners discovered some health problems and decided to not work anymore. We had a verbal agreement that she would still be a partner but would get no money unless/until she started working again. Fast forward to this year, we just got our taxes done for the business. Our tax person did our K1's and gave her 1 for 1/3 even though she didn't receive any money. I was assuming that this was kind of the risk she took on by still being a partner. She is upset because she had to claim it and her tax return was a little smaller than she had planned for. She thought she would get a $0 K1. Is this illegal? How should we move on in the future?
I own a very small business with 2 other people. We are all equal partners. Last year 1 of the partners discovered some health problems and decided to not work anymore. We had a verbal agreement that she would still be a partner but would get no money unless/until she started working again. Fast forward to this year, we just got our taxes done for the business. Our tax person did our K1's and gave her 1 for 1/3 even though she didn't receive any money. I was assuming that this was kind of the risk she took on by still being a partner. She is upset because she had to claim it and her tax return was a little smaller than she had planned for. She thought she would get a $0 K1. Is this illegal? How should we move on in the future?