In TurboTax, when reporting the sale of assets of an LLC (especially under IRC Section 338), you would typically want to ensure that you correctly identify the nature of the sale to avoid any misclassification. Here’s how you can navigate the TurboTax interview process for this situation:
Navigate to Business Income and Expenses: Instead of going into "Capital Gains and Losses," it’s better to start from the Business section, as you are dealing with an S-Corp and the sale of assets from an active business. You can follow these steps:
- Go to the "Business" section of TurboTax.
- Select "Business Income and Expenses."
Enter Sale of Business Assets: After you choose to enter your business income, you should see an option to enter the sale of business assets. This is where you can report the sale of the LLC's assets.
- Look for a section called "Sales of Assets" or "Sales of Business Property."
- Follow the prompts to enter the details of the assets sold, including descriptions and the amounts.
Capital Gains Calculation: TurboTax will guide you through calculating any capital gains or losses from the sale of these assets. It will ask you for the basis in the assets and the sale price.
Refer to TurboTax Help Articles: While I don't have direct access to TurboTax's knowledge base articles, you can search for terms like "reporting sale of business assets" or "IRC Section 338 sale" on their support site. They provide helpful articles that can guide you through specific situations like yours.
Utilize TurboTax Live Support: If you're still unsure about how to proceed, consider using TurboTax Live, which offers access to tax professionals who can assist you with complex situations. They can provide real-time guidance based on your specific circumstances.
Additional Tips:
- Documentation: Make sure you have all necessary documents related to the sale, including purchase agreements, asset valuations, and any prior depreciation taken on the assets.
- Consult a Professional: Given the complexity of IRC Section 338 and asset sales, it may also be beneficial to consult with a tax professional who is familiar with S-Corps and asset sales to ensure compliance and accuracy in your tax return.
If you have specific questions or need further assistance, reaching out to TurboTax support directly can provide additional guidance tailored to your situation.
