My husband and his two brothers inherited their parents' residential properties upon their death in 2008. In 2020, they created an LLC to hold the property for liability purposes. The property was vacant for the entire time. We sold the property in 2023 which resulted in a K-1. The LLC did not file a K-1 in previous years. The K-1 for 2023 was the first and last K-1 filed as they completely dissolved the LLC after the sale of the property. I am struggling with the correct way to enter the K-1. I got some previous online advise that instructed me as follows -
"the k-1 should have been marked final so check that box in Turbotax - it was.
next check the box partner sold or otherwise disposed of his entire interest (partnership ended in 2023)
then check complete disposition
then check liquidated partnership which is what happened when all the assets were distributed to the partners/members and the LLC dissolved.
dates acquired and sold (liquidated)
sales price 0 cost basis o ordinary gain 0
this assumes his tax basis after receiving the liquidating distribution was zero which is most likely the case.
I have no way of determining his tax basis.
all items of income/loss should now flow to the proper schedule on the various tax forms."
I have done this as instructed but now I have two more questions. The expert above told me to put zero in the ordinary gains box on the sale information page, but there was an ordinary loss of -501 as shown on form 1065, so should I enter zero or -$501? I did put the -$501 on the 1065 form section, so do I need to add it here also?
Also having trouble on the screen that calculates my at risk amount. It asks me to enter the adjusted basis on Jan 1 2023, The Partner Basis worksheet we received from the accountant shows zero on line one, adjusted basis from preceding year, so I assume I should put zero on this entry. - Then it asks for increases in basis since 2022; line 9 from the work sheet says $62,243, so I assume I should put this number there. Is this correct? Thank you for your help.
