Sign Up

Why sign in to the Community?

  • Submit a question
  • Check your notifications
or and start working on your taxes
cancel
Showing results for 
Search instead for 
Did you mean: 
cpczyz
Returning Member

Sale of LLC (taxed as Scorp) Membership Interest

In 2020 I sold my interest in an LLC taxed as an S-corp.  How do I enter this in Turbo Tax?

 

I was 50% owner, and sold all of it.  

4 Replies
Carl
Level 15

Sale of LLC (taxed as Scorp) Membership Interest

You "should" have received a "final" K-1 showing your disposition of your interest in the S-Corp. Did you?

DaveF1006
Employee Tax Expert

Sale of LLC (taxed as Scorp) Membership Interest

It depends on the K1 also. To clarify did you receive a K1 for a partnership (1065) or an S-Corp (1120S)?

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
cpczyz
Returning Member

Sale of LLC (taxed as Scorp) Membership Interest

I received an K1 (1120s) but it just reflects the business  income  for the portion of the year of ownership (12.5% of year).

DaveF1006
Employee Tax Expert

Sale of LLC (taxed as Scorp) Membership Interest

It depends. This would considered a sale of a capital asset and would be reported in this manner. In this example, the membership interest is reported like a stock in this instance because it is considered a share or a piece of the S-Corp.

  1. Log into or open Turbo Tax
  2. Go to federal>wages and income>investment income>stocks, mutual funds, bonds, other
  3. Select No you did not get a 1099-B for this transaction
  4. Next screen will ask the sale information for your membership interest such as description, date sold, date acquired, sales proceeds, cost (meaning what you paid for it) Holding period. This determines long term or short term capital gains.  If you owned the membership more than one year, it's long term.
  5. Next screen you can skip unless you paid federal withholding tax or if those other items apply.
  6. Then finish out the section to complete the reporting.
     

 

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
Dynamic AdsDynamic Ads
v
Privacy Settings