I've been following this fascinating discussion as someone who recently helped a family member through a similar partnership buyout situation. The collective wisdom here about analyzing K-1s for hidden value is spot-on, and I wanted to add one more practical consideration. Given that you have K-1s from so many different states, I'd suggest checking whether the partnership has been consistent in its accounting methods across all jurisdictions. Sometimes partnerships use different depreciation methods or timing recognition between states, which can create discrepancies that either overstate or understate your capital account in certain jurisdictions. More importantly, the executive's behavior pattern - identical offers, targeting only former employees, artificial urgency - reminds me of situations where insiders know about pending major events like asset sales, merger discussions, or large contract wins that would significantly increase valuations. One red flag that hasn't been fully explored: if this executive is making these buyout approaches personally rather than through the company's official channels, that could indicate he's acting without full board approval or trying to acquire shares for his own benefit rather than the company's. I'd recommend documenting not just the offer details, but also HOW the offer was made. Was it through official company letterhead? Did it reference board authorization? These details could be important if you need to challenge the process later. The K-1 analysis everyone has outlined gives you strong evidence to push back, but the procedural irregularities might give you additional leverage to demand transparency about what's really driving this sudden buyout campaign.

This thread has been incredibly educational to follow! As someone who's dealt with partnership tax issues for years, I wanted to add a perspective that might help with your analysis. One thing that stands out about your situation is the sheer volume of state K-1s you're receiving. In my experience, partnerships typically only file in states where they have substantial economic activity - either significant revenue, employees, or assets. The fact that you're getting forms from 11+ states suggests this company has grown far beyond what most small partnerships look like after 5 years. Here's a practical approach that worked for me: create a simple chart showing your allocated income (Box 1) minus distributions received (Box 19) for each year. That difference represents earnings that stayed in the business and should have increased your ownership value. If that cumulative number is substantial over 5 years, it's hard evidence against any "flat value" claim. Also, the executive's approach of making identical offers to multiple former employees while apparently leaving current employees alone is a huge red flag. It suggests current employees have access to information about the company's true performance or future prospects that former employees don't. Don't let artificial urgency force you into a bad decision. If they're truly offering fair value, they shouldn't mind waiting for you to do proper due diligence with your CPA. The pressure tactics alone suggest they know something you don't - and that's exactly why you need to take time to figure out what your shares are really worth.

I'm so sorry you're going through this difficult time. Divorce is stressful enough without having to worry about tax implications too. Based on what you've shared, it sounds like you're in a pretty good position tax-wise, which should be one less thing to stress about. From the numbers you provided, your capital gain would be around $300,000 ($620,000 sale price minus $320,000 purchase price). But as others have mentioned, don't forget to add any qualifying home improvements to your cost basis - that kitchen reno and HVAC replacement you mentioned could reduce your taxable gain significantly. One thing I'd recommend is getting everything documented now while you still have access to all the records. Make copies of the original purchase documents, receipts for major improvements, and any other relevant paperwork. During my own divorce, things got scattered between lawyers and moving, and it was much harder to track everything down later. The good news is that with the capital gains exclusions available and the improvements you've made, you'll likely owe little to no capital gains tax regardless of whether you finalize the divorce before or after the sale. Focus on what makes the most sense for your overall settlement rather than just the tax implications. Wishing you the best through this process!

I went through this exact situation about 18 months ago, and I wanted to share what I learned since you're dealing with so many of the same issues I faced. The stress of managing divorce proceedings while trying to understand tax implications is overwhelming, but you're asking all the right questions. From my experience, the timing decision really came down to our overall financial picture rather than just the capital gains tax. We ended up finalizing the divorce before the sale because it simplified other aspects of our settlement, and we each claimed the $250k exclusion on our respective halves. Given your numbers and the improvements you've mentioned, you should be well within the exclusion limits either way. One thing that really helped me was creating a simple spreadsheet with all the scenarios - married filing jointly vs. divorced filing separately, different timing options, etc. It made it much easier to see the actual dollar differences and discuss with both my divorce attorney and tax preparer. The most important thing I learned is that the capital gains exclusion is pretty forgiving for divorce situations. The IRS recognizes that people's living situations change during divorce proceedings, so as long as you both meet the basic ownership and use tests (which you clearly do after 9 years), you should be fine. Hang in there - this part of the process does get resolved, and it sounds like you're being very thoughtful about planning ahead. Having one less financial worry during this time will be a huge relief.

E-file if you can! Paper processing times are insane rn

For the mailing address, you'll need to check your state on the IRS website since it varies by location. But honestly, if your amended return is for 2019 or later, definitely go with e-filing through tax software - it's so much faster than paper. The processing times for mailed returns are still pretty brutal right now.

Anyone know if the support test includes the value of the living space? Like if mother in law has her own bedroom in our house, do we count what that room would rent for as part of our support contribution?

Based on what you've described, you have a good chance of being able to claim your mother-in-law as a dependent! The key factors working in your favor are that you're providing more than half her support (housing, food, utilities, cell phone) and she's living with you for more than half the year. The main thing to watch out for is the gross income test. Her Social Security payments ($1,450/month) may not all count toward the income limit if she's not required to file a tax return, but you'll need to include the full amount of her 401K distributions ($600/month = $7,200 annually). Since the gross income limit is $4,400 for 2024, those 401K distributions alone would exceed the threshold. I'd recommend consulting with a tax professional or using IRS Publication 501 to determine exactly how much of her Social Security income needs to be counted. The rules around Social Security taxation can be complex and depend on her total combined income from all sources. Also keep detailed records of all the support you provide - housing costs, food, utilities, medical expenses, etc. You'll want to be able to demonstrate that your contributions exceed 50% of her total support if the IRS ever asks for documentation.

I'm so glad you're taking this step! As someone who recently went through filing 6 years of back taxes, I wanted to share a few things that really helped me get organized and reduce the stress. First, don't feel like you have to tackle all 9 years at once. The IRS generally considers you compliant if you file the last 6 years, so you might be able to focus on 2015-2024 initially. Start with 2021-2024 since those are the years where you can still claim refunds if you're owed any. For gathering documents, I found it helpful to create a simple checklist for each year: W-2s, 1099s, interest statements, etc. If you're missing W-2s, Form 4506-T will get you wage transcripts from the IRS for free - much easier than chasing down old employers. One thing that surprised me was how understanding the IRS was when I called them directly. If you can get through (which admittedly can take hours), they can tell you exactly what income they have on file for each year and confirm which years you actually need to file. The emotional weight of this is real - I put it off for years because it felt so overwhelming. But honestly, once I started gathering documents for just one year, it became much less scary. You're doing the hardest part right now by deciding to tackle it head-on. You've got this! Taking control of the situation now, before they come to you, puts you in a much better position.

I just wanted to add my support and share something that really helped me when I was in a similar situation with 7 years of unfiled returns. The shame spiral is so real - I kept putting it off because I was embarrassed about how long I'd waited, which just made the problem worse. One thing that gave me courage to finally start was realizing that the IRS deals with this situation ALL the time. You're not some unique terrible person - life happens to lots of people, and the tax system has processes in place specifically for situations like yours. A practical tip that saved me tons of stress: when you start gathering documents, don't aim for perfection on the first pass. Just collect whatever you can find easily, then use Form 4506-T to fill in the gaps. I wasted weeks trying to hunt down every single document before I learned about the transcript option. Also, the fact that you've been at the same job this whole time is actually going to make this much simpler than you think. Most of your income documentation will be straightforward W-2s, and if you haven't had major changes in your tax situation year to year, you can probably use one year as a template for the others. You're already showing incredible strength by facing this head-on instead of continuing to avoid it. That first step really is the hardest part, and you're already taking it by asking for help here. You've got this!