ok. We're ready to go here.
- As you enter your final K-1 amounts in TT, make sure you indicate that you have sold your LLC interest. There will be some follow-up questions related to the sale.
- You indicate that you have maintained a basis schedule AND that your K-1 section L indicates tax basis. Do these two amounts agree?
- I assume from your facts that you have suspended losses? If that is the case, then you will be able to utilize these on the current year tax return. These will be freed up since you told TT you sold this entity. These losses are ordinary losses; assuming that was their original character.
- Interesting that only box 1a of the 1099-B has an amount. Almost seems worthless if this is all it has included.
- Regardless, you need to determine your basis after taking into account your final K-1 amounts EXCLUDING any liquidating distribution.
- Once you have determined your final basis you are able to determine your overall gain or loss.
- Finally, you look at your basis and subtract your liquidating distribution. If you still have basis remaining, this remaining amount means you have a capital loss. If your basis goes "negative" then this means you have a capital gain to the extent of the negative amount.
- Regardless of whether you have a capital gain or capital loss, both of these amounts will be reported on Schedule D and the applicable form 8949.
- TT will compute this gain or loss as you answer the questions related to the sale. The selling price is your liquidating distribution. Then obviously your basis is your basis figure, once again before taking into account your liquidating distribution.
*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.
