Need help with K-1

[viviank]

My husband was 1/3 owner of his deceased parents' property. While trying to sell, they created an LLC (in 2020) to hold the property for liability purposes.  The property sold in 2023 and checks were disbursed. Then the LLC was dissolved because it was no longer needed.  He received a Final K-1, which has amounts in boxes 1, 5, 10, 14, and 20.  The amount in line 10 and 14 are negative numbers as we took a loss on the property. I should  check "this partnership ended in 2023" because the LLC was dissolved. The next screen asks "Describe parnership disposal" and my choice are No entry; Complete disposition; Disposition was not via a sale; and sold an am receiving payments.  Of these choices, complete disposition seems the most appropriate. 

The next question is "What type of disposition is this?" My choices are Sold partnership interest; abandoned partnership; liquidated partnership; owner died and interest was transferred.  None of these seems correct but it says if I don't know, choose "sold partnership interest".

Then it asks for information about the sale of the LLC but this does not seem pertinent as we sold the property, not the LLC. But if I don't enter anything it says I have zero loss and zero gain.  

I'm completely lost.  Is there anyone who can point me in the right direction?

[Mike9241 · Accepted solution]

the k-1 should have been marked final so check that box in Turbotax

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 inome/loss should now flow to the proper schedule on the various tax forms.

[viviank]

Thank you for your help. I have another question. TT asks to choose what type of activity the LLC engaged in - my choices are 

Business, rental real estate, other rental, other or This K-1 reports amounts in more than one of boxes 1,2,3. To me the logical answer seems to be "other." While he was 1/3 owner of his parents' home, it was never rented. Also, we didn't really operate a business, so in my opinion it seems like the best choice is other.  Does that seem right? TIA

[PatriciaV]

Yes, this LLC would fall under the "Other" activity category, since it was essentially a holding company for the inherited assets.