Tax Year Prior to 2020: How do I properly record converting an LLC into a C Corporation in TurboTax?

[accounts-mint]

I converted my LLC to a C Corporation during 2019. When filling the K-1 entry in TurboTax, I checked "This partnership ended in 2019", followed by "Disposition was not a sale".

However, on the next page it asks me to fill in the Purchase Date and Sale Date. I just said it wasn't a sale!

Should I put Purchase Date and Sale Date as the date of conversion?

[Anonymous_]

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@accounts-mint wrote:
I converted my LLC to a C Corporation during 2019. When filling the K-1 entry in TurboTax, I checked "This partnership ended in 2019", followed by "Disposition was not a sale".

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Who prepared the 1065 for your LLC?

Your K-1 should indicate that it is a final K-1 and, typically, a short tax year ending at a certain date in 2019 since the LLC terminated.

You can also select "No entry" for a disposition.

[accounts-mint]

Thanks for the reply. The 1065 was prepared by the company's accountants. 

The K-1 does indicate that it is final, and shows a short tax year.

However, TurboTax asks for a "Purchase Date" and "Sale Date" -- what should I enter for those?

Is "no entry" better than "not a sale"? I don't understand what these choices actually do.

[VictorW9]

Also, converting an LLC to a C corp may trigger a taxable event. You should have been tracking your basis in the LLC and when converted should now become your basis in the C corp except of course you contributed additional capital.

[Carl]

Keep in  mind also for the S-Corp that the business start date is the same exact date the partnership was started -even if in a prior year. But the "incorporation" date is the day after the partnership was terminated. It's important to understand that, or asset depreciation will be thrown out of whack.

[accounts-mint]

Thanks for the tip.

Under what circumstances would it trigger a taxable event?

Wouldn't whatever tax obligations I have be reported on the K-1?

[accounts-mint]

It's a C corp, not an S corp.

I'm just trying to understand what Turbotax wants for the "Purchase date" and "Sales Date'.

Like, what is asking for?

Are you saying that you think that "purchase date" = "business start date" and "sale date" = "conversion date"?

How does this affect asset depreciation?

[Anonymous_]

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@accounts-mint wrote:

I'm just trying to understand what Turbotax wants for the "Purchase date" and "Sales Date'.

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You can actually leave those fields blank as long as you have indicated you disposed of the property and entered a date for the disposition.

When you transfer your 2019 return to your 2020 return (next year), the asset will not appear.

[hihello]

What did you come up with? I am in same situation.