Merging 2 LLC (S corps)

[Ksharpsci]

I own 2 LLCs that own a commercial real estate property 70% and 30% respectively.  On 12/31/21 I merged the smaller entity into the larger one in an asset over merger.  I filed the paperwork with the states.  Both had income in 2021 but I don’t know how to reflect the asset over (no gain transaction) inside TurboTax. In the end I’m assuming my balance sheet would be zero for merging entity and all assets and liabilities would be reflected on the gaining balance sheet at year end.  Do I record as a sale at zero cost or at the asset value on the books at the time?  Help??

[RobertB4444 · Accepted solution]

For the company that you are dissolving you need to enter all the sales at current asset value - no gain and no loss.  Mark the return as final.

Then you need to create new assets in the company that you are keeping.  These assets should have the exact same value and depreciation life that they had in the dissolved company.  Then you enter all of the sales and expenses for the year into the new company.  

[Ksharpsci]

Do I click the box on the dissolving company that I’m selling it and if I do is it just at zero $ amounts?  Or do I just zero out the assets on balance sheet manually?

thanks 

[JohnB5677]

Yes, you should zero out the assets on the balance sheet manually.

Also, see this TurboTax guidance on Closing a Business.