It depends. If this was a partnership or S-Corp, all partners should receive Schedule K-1 no matter how long they were invested in the company.
In the case of a partner leaving a partnership, you have two options: 1) submit a request for extension to file so you can wait for the eventual K-1 or 2) file now and amend later if necessary.
For the second option, you would set up the partnership under Business Income >> Schedules K-1 (even though you don't have one yet).
- Enter the partnership information and indicate this was a final K-1.
- Report that you "sold" your investment as a complete liquidation.
- Enter no income or expense (nothing for K-1 boxes).
- When the program asks about the sale, enter the reimbursement he received as the sales proceeds and the initial investment as the remaining basis.
- This will report a short-term capital loss (because he held it for less than a year) on Form 4797.
C-Corps, however, do not send K-1s to their investors. If your husband purchased stock and later sold the stock at a loss, this activity would be reported in TurboTax under Stock, Crypto, Mutual Funds, etc. as the "sale" of stock at a loss.
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