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twis
New Member

On my 2017 return I forgot to mark a K-1 for an LLC as "final". Do I need to amend the 2017 return or can I handle it on this year's return (2018)?

 
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Accepted Solutions
Rick19744
Level 11

On my 2017 return I forgot to mark a K-1 for an LLC as "final". Do I need to amend the 2017 return or can I handle it on this year's return (2018)?

Here are some comments:

  1. You indicate that everything was a passive loss, but the question is whether or not you had suspended losses.  You will find these on form 8582 detail.
  2. Unless you have other K-1's that are passive and generating income, you most likely do have some suspended losses.
  3. Check you K-1 section L.  If this is marked "tax basis" then you will be able to determine your overall gain or loss. If it is not marked "tax basis" then you will need to determine your basis to compute your overall gain or loss.
  4. Additionally, since 2017 was the final year, if you in fact had suspended losses then these would be "freed up" and would offset other income.
  5. So to address your overall question, if you had suspended losses and did not mark the K-1 final in TT when preparing your 2017 tax return, then "yes" you need to amend that return.  You cannot make the adjustment on your 2018 tax return.
*A reminder that posts in a forum such as this do not constitute tax advice.*

View solution in original post

5 Replies
Rick19744
Level 11

On my 2017 return I forgot to mark a K-1 for an LLC as "final". Do I need to amend the 2017 return or can I handle it on this year's return (2018)?

Two questions:
1) Did you have any suspended losses?
2) Have you maintained a basis schedule of your investment in the LLC?
*A reminder that posts in a forum such as this do not constitute tax advice.*
twis
New Member

On my 2017 return I forgot to mark a K-1 for an LLC as "final". Do I need to amend the 2017 return or can I handle it on this year's return (2018)?

Everything was a passive loss.  I know  the initial values and all $ flow in/out if that is what you mean by basis.  

I was surprised when TTax identified it even though I did not enter  K-1 data this year.  It took me a while to figure out that I missed that check box last year.
Rick19744
Level 11

On my 2017 return I forgot to mark a K-1 for an LLC as "final". Do I need to amend the 2017 return or can I handle it on this year's return (2018)?

Here are some comments:

  1. You indicate that everything was a passive loss, but the question is whether or not you had suspended losses.  You will find these on form 8582 detail.
  2. Unless you have other K-1's that are passive and generating income, you most likely do have some suspended losses.
  3. Check you K-1 section L.  If this is marked "tax basis" then you will be able to determine your overall gain or loss. If it is not marked "tax basis" then you will need to determine your basis to compute your overall gain or loss.
  4. Additionally, since 2017 was the final year, if you in fact had suspended losses then these would be "freed up" and would offset other income.
  5. So to address your overall question, if you had suspended losses and did not mark the K-1 final in TT when preparing your 2017 tax return, then "yes" you need to amend that return.  You cannot make the adjustment on your 2018 tax return.
*A reminder that posts in a forum such as this do not constitute tax advice.*

View solution in original post

twis
New Member

On my 2017 return I forgot to mark a K-1 for an LLC as "final". Do I need to amend the 2017 return or can I handle it on this year's return (2018)?

Thanks for the clarification, Rick.  I wasn't tracking the term,  Section L does indicate tax basis.  Looks like I get to figure out amending that return.
Rick19744
Level 11

On my 2017 return I forgot to mark a K-1 for an LLC as "final". Do I need to amend the 2017 return or can I handle it on this year's return (2018)?

You need to be careful in determining your overall gain or loss using the K-1 tax basis.
I recommend you review Section L carefully; especially the "other increases / decreases line and the distributions / withdrawals line.  Many times there is an amount that is used to zero out the capital account in one of these lines.  Make sure you do not include this figure in the determination of the overall gain or loss.
*A reminder that posts in a forum such as this do not constitute tax advice.*
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