I used to be in a partnership for a home based cleaning business for a few months. There was no profit made nor did the business break even. My ex-business partner wants me to give his personal accountant my SSN and other personal information so he can have a K1 form prepared to write off the losses (about $1600). I'm not comfortable giving out such information and wanted to know if I'm obligated to do so. Can I opt not to file the loss as a tax write off?
1 Answer from Attorneys
A partnership issues a K-1 to each partner setting forth the amount of income or loss attributable to a partner's pro rata share of the partnership; ie: if you are 50% partners, each gets 50% of the gain/loss. The partnership needs your SSN to issue that K-1. I would suggest you contact the accountant and ask what he/she is showing as income/expenses and gain or loss to be sure it is accurate. What other personal info is involved? If it's your address, they need it to mail out the K-1. If it's something else, ask why they need it and evaluate if it makes sense. You can not claim a loss as long as you are not doing it to cover up unreported income or conceal other information that you are required by law to report. You have not provided enough specifics for me to comment or advise you on that issue.
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