Final non-cash asset distribution from LLC
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New Member

Final non-cash asset distribution from LLC

Hello,  I have a 2 person Rental Real Estate LLC where everything is 50/50.  2020 is the final year.  The rental house is going to be distributed to the members equally and not sold.  How do I enter that in Turbot tax.  If I indicate it is the final year, then the system wants a disposition date entered.  If I enter a disposition date, then the system is looking for proceeds and appears to be creating a 4797 form which does not appear correct.  How should this be entered for the final return?  Thanks

3 Replies
Level 7

Final non-cash asset distribution from LLC

You have a liquidating distribution of the LLC which you will show on the return....return marked as final....as property distributed to each member....presumed to be 50/50.  This is not a sale to the members like it would be if you had a corporation. You should read through the entire article at this link for more info: https://www.thetaxadviser.com/issues/2016/jun/liquidation-of-llc.html

New Member

Final non-cash asset distribution from LLC

Thank you for the reply and link to the article. 

 

My issue seems to be with how to get Turbo Tax to not want to force a disposition which then creates the completion of the form 4797.  I tried to force the 4797 to be $0 by inputting proceeds equal to the remaining basis, but then those proceeds are listed within the state return as gross proceeds. Is there a guide for how to complete the process within TT?

Level 7

Final non-cash asset distribution from LLC

Maybe call customer service for entry steps. You're distributing property and ending the partnership so you need to file a final return and the depreciation will end at the date you specify. There should be no other form like a 4797.

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