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Business & farm
Ok. Comments as follows:
- As members in an LLC taxed as a partnership you need to maintain a schedule of your basis in the LLC. This begins with your capital contributions and is update annually for the applicable lines on the K-1.
- What you had in 2016 were in fact capital contributions to the LLC and then the LLC had the offsetting expense. Hopefully this is what was reported on the 2016 form 1065 and Schedules K-1.
- Appears that the 50/50 reporting was appropriate in 2016.
- Not sure you actually had a formal capital / ownership change. What happened is one member contributed additional funds. The way the tax code works is that allocations need to have substantial economic effect. A complicated concept, but at the end of the day, it just means they need to make sense economically and no shifting of the economics. In your case, to maintain substantial economic effect, you should be allocated all losses to the extent of your additional $3,500 contribution.
- In order to obtain the result noted in item 4, you either need to change the profit and loss allocation to 100% for you, but leave the capital percentages as 50/50, or you may need to go into the special allocation section and override the allocation.
- What I don't know without actually seeing a return, is whether this is the end? This should mean that the one member gets nothing, since they had no capital / basis at the beginning, and with your allocation you should also end up with close to zero capital / basis.
- There shouldn't be any cash to distribute so I would imagine that the balance is zero at the end of the period?
- You should file a final VA return to notify the state that the LLC will no longer be filing.
- Since you registered in FL you should probably file an initial and final FL-1065 as well.
- Some Secretary of State offices require an annual fee until a business "unregisters". You may want to follow up with each state to see if this is required so you don't end up have to pay additional fees.
*A reminder that posts in a forum such as this do not constitute tax advice.
Also keep in mind the date of replies, as tax law changes.
Also keep in mind the date of replies, as tax law changes.
‎June 3, 2019
12:45 PM