You'll need to sign in or create an account to connect with an expert.
If this is a multi member LLC and you're using TTBiz you should get help from a tax pro. You get a new holding period for the assets and a step up in basis with the new LLC. A lawyer should be involved too.
When TTBiz asked 'Bought or Sold a Business this year" do I say "yes" because I transferred property into a new LLC and then sold the LLC or do I say "no" and record the sale of the property over in the details of the property section?
This question is not clear.
You can't have a drop down and a sale of the same assets. You can in two separate transactions, but need clarification on what actually happened.
You either have a drop down, which means you contributed assets into another entity structure, or you sold assets to another entity.
It was a drop down sale. I moved a rental property to a new LLC and sold the LLC.
In TTBiz, I feel I should answer "Yes" to the question 'Bought or Sold a Business this year". But when I do, I never get asked details about the transaction. In the section on rental property details, I need to answer that I did dispose of the property, but not of the reasons seem to apply to my situation. How should this be handled in TTBiz?
We still don't have sufficient details to address your question:
Sorry if I am asking in TT online. I thought I was in general Turbotax help.
The property was originally held by a multi-member LLC before being transferred to the drop down LLC. TTBiz was used for taxes all the previous years.
While it is the goal to provide a response to a question, some questions are just not conducive to being able to be addressed in a forum such as this.
Your response brings up many more questions, and at this point, I agree that you will be best suited to have a one on one with a tax professional.
Having said that, here are some additional questions that will need to be addressed and some comments:
Unfortunately, as you can see, regardless of the size of a transaction or business entity, the tax issues can get complicated very quickly. You would be wise to spend the $$ with a tax professional, as any improper reporting could end up costing you way more in tax and penalties; not including your time in dealing with the IRS on the issue.
Sorry for the delay in answering - I have been out with Covid, but I am back among the living now.
Let me see if I can explain better. A multi-member LLC with rental property transferred ownership of the rental property into a new multi-member LLC with the original multi-member LLC as one of the owners. Then the original multi-member LLC sold its interests in the new LLC to the other new LLC members.
In TTBiz, for the question 'Bought or Sold a Business this year", should that be answered "Yes" since ownership in the new LLC was sold? In the section on rental property details, the fact that the rental property was disposed of needs to be identified, but none of the reasons seem to apply to this situation. Can TTBiz handle this type of transaction, a Drop Down LLC transfer?
TurboTax Business can certainly handle the transaction but will you be able to answer all of the questions correctly? Are the related party rules triggered by the percentages of ownership here? Are there transfer taxes liable in your locality?
TurboTax is a great tool but you're in a very complicated area here - one which is beyond the scope of this forum. I am going to re-iterate the advice issued to you by @M-MTax and @Rick19744 - hire a professional to sort this out for you.
Still have questions?
Make a postAsk questions and learn more about your taxes and finances.
fundunski
New Member
sam992116
Level 3
klc23
New Member
Vinsca
New Member
jp1600a
New Member
Did the information on this page answer your question?
You have clicked a link to a site outside of the TurboTax Community. By clicking "Continue", you will leave the Community and be taken to that site instead.