(2) K-1s from same company for same year

Client received (2) K-1s from the same investment partnership for 2018. Same EIN, same name, same address, same short year. There are differences under J, partner's share of profit, loss and capital. The ending capital accounts are also different. Tax method is hybrid. The supplemental info says that "the LLC does not know the tax basis of the the property owned by the LLC since if would be based o the tax basis of each member of the LLC in their bankruptcy claim. The capital account is maintained on the basis of a valuation of llc property at inception of xxxx amount." What is going on here? Thanks in advance.

Sometimes the k-1s will have a partner # in the upper/lower right/lerft corner. They may have multiple interests in this entity. Just report both.

Now if it's the same interest (not two separate interests) you will need to figure out what's going on. Was it amended, did they release an unfinalized version of the k-1? I have no idea you may havce to figure that out. there are time stamps on k-1s often as well.

Do you have a copy of the LLC's operating agreement? That might be a good place to start if you haven't looked at it already.

If the OA doesn't bring absolute clarity I would ask the client if he/she knows what's going on. If he/she doesn't know, I would ask for the LLC return preparer's contact information and ask them directly.

The only time I saw multiple K-1s for individuals in a partnership was when the partnership had two classes of units. One preferred class and one common class. Some individuals owned both classes.

Agree with Terry that you should report both K-1s on the 1040 as long as they're both for the relevant tax year, but it's good to understand what exactly is going on.

Yeah, I'll echo what ManVsTax says, it's "good" to understand what is going on, but personally, I wouldn't do anything with the two K-1s' information unless and until I knew - or thought I knew - what's really going on. Call somebody, and then call somebody else, and see if you can get two sources with the same explanation before you plunge blindly into this one. There is an answer out there, and it's only phone call away. It will be much harder to undo this if you get it wrong the first time around!!

Thank you all. Yes, it maybe 2 classes of units. I'll give the client a call and see what I can find out.

A technical termination would give you 2 K-1 forms, but one ending capital account would (probably) be $0, as would (probably) the beginning capital account of the other K-1.

Forget that, 2018 partnership wouldn't (shouldn't) have a technical termination.