I am ending the LLC partnership and becoming a single member LLC. I cant see where trubotax supports this. said I was gifting my interest but not doing that. Help?

[zhullflyer]

TT says I am gifting, but am not.  I unchecked it.  Now gives me a warning.  Can I still file on-line with that warning message?

[Anonymous_]

Can you explain exactly what you are trying to do in detail? 

Multi-member LLCs default to being taxed as partnerships and typically file Form 1065 and issue K-1s to members. Did you receive a final K-1 from the LLC? 

[zhullflyer]

What you said it correct.  I have a LLC called NAME and it was a partnership. On 12/31 the partnership was dissolved BUT I kept the name and it is now a single member LLC.    On schedule K1 Additional Info in part 2 it requires me to enter a disposal reason (they chose gift) but that is incorrect.  I did not sell or gift anything. I just became a single member.    Now I a warning message that says I must enter something but none of checkboxes are correct.    Can I still file online or do I need to use a incorrect checkbox. 

[zhullflyer]

I forgot to say this is the Final K1.  If we did not say it was a final K1, everything works. 

[zhullflyer]

@Anonymous_ responded.  Didn’t see the @ before. 

[Anonymous_]

Who prepared the final return for the LLC? 

Also, what happened to the other member? Was there a buyout? Assets (e.g., equipment, fixtures, inventory)?

[Carl]

For the partnership to dissolve, all the assets must be removed from the business. Either thay are sold, or if the asset was contributed by a partner, then it's the return of that partner's capital contribution.

If this is a case where you bought out the other partner, then your K-1 "should" show your acqusition of the other partner's share, and reflect the fact that you paid for it some how. (Be it via cash payment, or with your share of any earnings from the partnership.) 

Your own capital contributions are shown as a return of that capital contribution to you, which is not a taxable event. Kinda similar to saying it was removed from the business for personal use.

Once all that's done and the final K-1 is issued, you're done once and for all with the partnership return.

On your personal 1040 tax return you'll open a new SCH C business (which is a disregarded entity as far as the IRS is concerned) and enter any assets from the partnership there. Remember to account for any prior depreciation on those assets by reducing the cost basis of that asset accordingly. You are only adjusting the cost basis by "your" share of any depreciation taken.