TurboTax Business for passthru LLC stock distributions?

[KeithLa]

I'm in the process of taking over as (unpaid volunteer) manager for a 26 member angel investment fund LLC, due to its management vendor (Assure) suddenly shutting down this month, leaving us and many other investment fund special purpose vehicles (SPVs) scrambling.

In April 2022, our Delaware series LLC (of a separate master LLC) received a public stock distribution from its sole portfolio company as a result of an IPO. All shares received were "passed through" to the LLC members, with most distributed as stock transfers to 18 members, and the rest liquidated and distributed as cash to the other 8. Prior to these member distributions, a small portion of shares were liquidated and used to pay brokerage expenses.

Questions are: 

Can TurboTax Business be used for this LLC's 2022 tax year reporting of these share and cash distributions, and K-1 generation for the investor members?

What form(s) does the series LLC need to file to the IRS? I assume the receipt of the public shares, partial liquidation, and cash and share distributions reflect taxable events.

What documents/info are required from the portfolio company and brokerage in order for the LLC to do its tax reporting? My expectation is that either or both of those entities will make some filing to the IRS reporting the stock distribution to our LLC.

Note, this series LLC will be dissolved after this tax reporting is completed, as it holds no remaining assets, it existed solely for this lone startup investment, which is exited and complete.

Thanks for any/all guidance.

[Anonymous_ · Accepted solution]

TurboTax Business can be used for the preparation of the return since the included forms and Forms Mode allows the preparation of even complex returns.

However, you have ventured far past DIY territory and would be better served (from a tax perspective and also legally) by contacting a local tax professional for this matter.

See https://taxexperts.naea.org/listing/service/partnerships

[KeithLa]

Thank you @Anonymous_. Agreed, pro tax CPA support is preferred, and happily one of our LLC members happens to be one of those and already providing me with some guidance. That said, my aim is to avoid having to go collect hundreds or thousands of dollars (e.g. capital call) from our LLC members to pay a third party for these tax services, which were supposed to be delivered by the fund management company that's just informed us (and many, many other LLCs under their mgmt) that they will be gone by Dec 31 of this year.

My hope was that if these might all be standard taxable events -- stock distribution to the LLC, liquidation of a portion of that in one sale transaction, brokerage expenses paid, remaining stock and cash distributed to members -- that these might be reportable in TurboTax Business standard interview (i.e. not Forms Mode), using the raw data I have and advice from our CPA member. At this time, I don't even have bank and brokerage statements or other documentation to even hand off to a professional, I just know the stock and cash distribution amounts.

It's quite a pickle. Thanks again for your reply.

[Anonymous_]

---

@KeithLa wrote:

......these might be reportable in TurboTax Business standard interview (i.e. not Forms Mode), using the raw data I have and advice from our CPA member. 

---

Unfortunately, that is not the case and I believe you would have to make extensive use of Forms Mode. 

The interview (Step-by-Step) covers primarily uncomplicated scenarios.

[Critter-3]

What form has the LLC filed in the past ?   1065 ?  1120 ?  1120-S ?  990  ?

[KeithLa]

Regrettably, I do not have this information, it was never provided to me by the fund management vendor. It's a really mess.

[Anonymous_]

---

@KeithLa wrote:

Regrettably, I do not have this information, it was never provided to me by the fund management vendor. It's a really mess.

---

Seek local legal counsel.

See https://www.avvo.com/tax-lawyer.html