@martinlc What I would recommend is to amend your 2019 partnership return and make it a final return that distributes out the remaining assets of the partnership, so that the final capital account is 0. This has to be done to close out the partnership, and it is accurate because Schedule C is simply considered personal income that does not require you to maintain a capital account.
Now, doing this will force you to amend the 2019 personal return as well, as the IRS would get amended Schedules K-1 that would have to be reconciled. But as long as the distributions bring each partner's capital account down to 0, there is no tax consequence; just reporting. It would avoid having to do a final partnership return for 2020, and you could then proceed with filing two Schedules C in a qualifying joint venture. You will want to include a statement that makes that election and states that you qualify to do so because you live in a community property state. Of course, you must divide everything 50-50. You don't have another option if you choose this method.
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