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jjelder
New Member

Adding a new member to an LLC

I added a new member to an existing LLC resulting in a profit decrease for the 3 existing members.  TurboTax is asking me if the decrease is due to a sale of partnership interest or an exchange of partnership interest.  I don't think it should be either, but there isn't a different option.  Can you give me some guidance?  Thanks!

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1 Reply
RobertB4444
Expert Alumni

Adding a new member to an LLC

It's an exchange.  Unless your new member paid you to become a part of the LLC.  Enter it as an exchange as well as the date that the new partner was admitted so that the system can reduce the other three partner's interests as of that date and increase the new partner.  

 

@jjelder 

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