How to enter liquidating distributions in TT premium

[Kinnakeeter]

I was one of 95 shareholder in a s corp.  In 2022, we liquidated the sCorp through an asset sale. I received a K-1 with amounts or net capital gains, sec 1250 un recaptured gains, and net 1231 gains.  There is also note that says I should subtract my stock basis from an amount given as liquidating distributions and enter the amount on schedule D.  As far as I know, you don’t enter values directly on to Sch D in TurboTax, but I don’t know how to enter this information using the interview process in TT either.  Also, this subtraction would result in a negative amount, and where on Sch D would this be entered if I could?

[Rick19744]

A few comments:

• As a shareholder in an S corporation, you should be tracking your stock basis.
• You are correct in that you should not enter anything directly on Schedule D.
• You will update your stock basis for the applicable lines on your final K-1.
• When updating your stock basis for the final K-1, do not adjust the basis for any liquidating distribution.  See next bullet.
• Hopefully the liquidating distribution was reported to you on form 1099-DIV; which is the proper method to report this.  It should not technically be on the K-1 as a distribution.
• When you indicate that this is a final K-1 in TT, there will be some additional questions.
• One of the questions will be how you disposed of the S corporation stock.  Don't get hung up on semantics with the options as long as the end result is correct.
• At some point TT will ask for the selling price (even though this was a liquidation).  This amount is your liquidating distribution.
• Then TT will ask for your cost basis.  This is you stock basis.
• You will enter the final K-1 amounts just as you have in past years.
• TT will handle the rest
• If you truly have a negative amount as you indicate, this means that you have a capital gain.  So check for this on Schedule D.