Dissolving a club? Final tax return.

Jerry A. Dressel on

Steve recently asked.....

We dissolved our Club in July 2000. As treasurer, I would like to know if any special return needs to be filed or what tax agencies need to be notified to insure no further actions or liabilities can be brought against any member. Is there a website I can access to view and/or print an example of a Schedule D form which is filed with the 1065 Form?

Here are a couple of excerpts from IRS Pub #541 - Partnerships that apply to your situation.

"A partnership terminates when ......All its operations are

discontinued and no part of any business, financial operation,

or venture is continued by any of its partners in a partnership."

"The partnership's tax year ends on the date of termination"

"If a partnership is terminated before the end of the tax year,

Form 1065 must be filed for the short period, which is the period

from the beginning of the tax year through the date of termination.

The return is due the 15th day of the fourth month following

the date of termination."

The only thing special about the final tax return of your club, other than the fact that it is a "short period" return if the club terminates before the end of the year, is that the Form 1065 will be marked "Final Return" on line G and the K-1's will be marked "Final K-1" on line I. Also, as in your case, since the "short year" return is to be filed with the IRS before the end of 2000, you should use the 1999 tax forms to prepare your clubs final tax return.

With regard to insuring that "no further actions or liabilities can be brought against any member", simply have each member document their withdrawal from the partnership in writing. In addition to maintaining a permanent copy of the clubs transaction history, the club should keep copies of its tax returns, its Partnership Agreements and By-laws including amendments, and the letters of withdrawal from all members. If the club has filed timely tax returns, kept its books in accordance with applicable tax law, and operated in accordance with its Partnership Agreement there is little, if any, risk of any further actions or liabilities.

Is there a website I can access to view and/or print an example of a Schedule D form which is filed with the 1065 Form?

Form 1065 Schedule D is available on the IRS web site at http://ftp.fedworld.gov/pub/irs-pdf/f1065sd.pdf

Form 1065 is available at http://ftp.fedworld.gov/pub/irs-pdf/f1065.pdf

Schedule K-1 is available at http://ftp.fedworld.gov/pub/irs-pdf/f1065sk1.pdf

Thanks for using bivio.

Jerry Dressel
St.Louis, Missouri
Trez_Talk@bivio.com

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