How do I properly input the bankrupt LLC without a K-1? If I enter the invested loss through the TT LLC process it shows the loss on 1040 line 14.

[lukcicda]

Have shares in a private LLC that went bankrupt in 2015.  The assets were seized by creditors.  There are no employees.  There will be no K-1.  If I enter the invested loss through the TT LLC process it shows the loss on 1040 line 14.  Last year any losses were shown on 1040 line 17.  How do i properly input the bankrupt LLC without a K-1?

[TaxGuyBill]

There needs to be a K-1.  The partnership is required to file a "final return".

[lukcicda]

Thanks TaxGuyBill but there will never be a K-1 since the principal is gone and there were no other legally responsible persons.  All assets have been seized by creditors - no company, no principal, no K-1 but there are large investor losses.

[Rick19744 · Accepted solution]

TGB is technically correct, however, in many cases there is either no one around the organization to prepare the return and / or there are no funds to pay a professional to complete the tax returns.

As a member in an LLC you are required to maintain your basis in your LLC investment.  This begins with your initial capital contribution, adjusted annually for the applicable lines on the K-1 including any distributions.

If you have not maintained this, then I would recommend that you pull together all your K-1's and prepare your basis. This is the only way you will know your true loss.

Once you have your basis, then you can determine your loss.  If you have a positive figure, then this represents your loss in the venture; capital loss (assuming you did not make any additional capital contributions within the last 12 months which would make part of the loss short term).

This loss would be reflected on Schedule D and the applicable form 8949.  I would just delete the K-1 from the system.

If you ever do receive a K-1, then you can amend your return accordingly.

[m_chan1]

Great comments!

Easier said than done in Reality!
Though it's the members/partners/shareholders of the pass-through entities RESPONSIBILITY to track their basis, it typically falls to their accountant/tax professional, who reluctantly has No other choice but to do it for them, WITHIN REASON.
Don't forget that the tax prof will Bill you for the taxpayer's Irresponsibility of Not tracking the basis!
Imagine if that basis tracking project goes back several years? Heaven help the tax professional!

[lukcicda]

Thanks Rick (19744)  That will give me the most applicable solution