How do you correctly file a llc partnership k1 and...
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New Member

How do you correctly file a llc partnership k1 and you didnt make any net income and everything we invested turned to a net loss??

And we never got a k1
7 Replies
Level 10

How do you correctly file a llc partnership k1 and you didnt make any net income and everything we invested turned to a net loss??

Let's add some additional clarification / facts here:

  1. You indicate you invested in an LLC taxed as a partnership
  2. You indicate that you "never" received a form K-1 from this LLC
  3. When did you invest in the LLC?
  4. Why have you never received a K-1?
    1. Have you asked this question to the LLC
    2. They just don't understand their obligation?
    3. No funds?
    4. No technical ability to prepare internally?
  5. Is the LLC still in business?

Addressing these questions will allow for a better understanding and response.

*A reminder that posts in a forum such as this do not constitute tax advice.*
Expert Alumni

How do you correctly file a llc partnership k1 and you didnt make any net income and everything we invested turned to a net loss??

Further information is needed to completely answer this question.

 

  1. Why didn't you receive a K-1?
  2. who was responsible for preparing the Partnership K-1?
  3. Were K-1s issued for prior years?
  4. Has the business shut down for good?

 

If the LLC has gone out of business and will not issue a K-1, you may have a capital loss for the remainder of your investment. 

 

You are entitled to claim a capital loss for your basis in an investment that has become totally worthless.

 

Your basis in an investment equals the amount of money you invested minus any losses previously claimed, plus any gains previously reported, minus any distributions previously received.

 

In TurboTax you enter the disposition as a sale under 'Investment Income' as a sale of 'Stocks, Mutual Funds, Bonds, Other'.

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New Member

How do you correctly file a llc partnership k1 and you didnt make any net income and everything we invested turned to a net loss??

This was are first year of business. I'm not sure who was supposed to prepare a k1. We opened the llc thru incfile.com we got a EIN. The business isnt shut down so I'm not sure what to do I had a turbo tax pro try to help me but he wasnt even sure so I just want to make sure I do it right

Level 10

How do you correctly file a llc partnership k1 and you didnt make any net income and everything we invested turned to a net loss??

As a member of the LLC you need to figure out who will be in charge of the filing of the tax return.  

This is important, as a failure to file the return penalty is $205 per month per member up to 12 months.  That will become expensive very quickly.

Since the business is not shut down, you are not able to take any loss on this investment.  Based on the limited facts, there are not sufficient facts to support a loss at this time.

Someone needs to step-up on the financial side to take care of all filing requirements.

 

*A reminder that posts in a forum such as this do not constitute tax advice.*
New Member

How do you correctly file a llc partnership k1 and you didnt make any net income and everything we invested turned to a net loss??

I want to do that but is it possible to file myself online turbo tax business or go somewhere and get it done. I'm just not sure exactly how I file and report with no net income

New Member

How do you correctly file a llc partnership k1 and you didnt make any net income and everything we invested turned to a net loss??

I will do it. Is it possible to do it online turbo tax business or go somewhere and have them do it?

Also how do I file correctly by reporting no income

Level 10

How do you correctly file a llc partnership k1 and you didnt make any net income and everything we invested turned to a net loss??

It is possible to do this online, but you need to have some idea of what the end goal is for the return.

  • Here is a link for TT Business https://turbotax.intuit.com/small-business-taxes/
  • Note that TT Business is only available as a download and only works in a Windows environment
  • Keep in mind, that while you can do this using the above link, depending on you knowledge level, in the end it may be less expensive to have a professional handle this; you need to factor in cost, time involved, frustration level, risk of not completing the return correctly, etc.
  • There may be a state tax return as well
  • You note that the business is not shut down.  Will it continue?  What are the plans here.  This will impact the filing of the return; can you take a position that this is the initial and final return?  Are you going to need to also file a 2020 return at some point?
  • To dissolve the entity you will need to contact your Secretary of State.
*A reminder that posts in a forum such as this do not constitute tax advice.*
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