How/where to report distribution in excess of basis (LLC)?

Forum|Forum|7 years ago
June 4, 2019
1 reply
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My adjusted basis at the end of 2016 was $979. In 2017, my net decrease (real estate loss) was $2,070. I also received a distribution of $5,000.

It's my understanding that I have to report the excess distribution, since it exceeds my basis. I've entered all the 1065 K-1 information, but I don't see my excess distribution reflected anywhere. How/where do I account for it? And is the entire amount ($5,000) taxable, since my adjusted basis is negative/zero?

Thanks in advance.

TurboTax Premier Online

Best answer by PatriciaV

Yes, if you received a distribution that was more than your adjusted basis, you have taxable income. In most cases, this is a long-term capital gain, which is reported on Schedule D (as a sale with no basis).

To enter this, open your return and search on "investment sales," then use the jump-to link to go to the start of this section.

Choose "Everything Else" and follow the prompts to enter a description (ie: Distribution in Excess of Basis), the amount and the date you received the distribution. Continue to enter a Cost Basis of zero (because you have no remaining basis) and the date you first invested in the company. TurboTax will show a summary page that shows how this will be reported on your return.