jtax
Level 10

Business & farm

@daewoorocks glad to help as best I can. (FYI this is mostly a volunteer forum).

 

The amounts in box 8 and 9 are deducted in the year of the K1. They go to Schedule D line 5 or line 12 (CG from k-1s for partnerships, s-corps, estates, and trusts). (LLC's are taxed as partnerships unless they elect to be taxed as a corporation, which is unlikely for an investment vehicle.)

 

So my first suggestion is that you check your 2019 and prior year Schedule Ds to see if those losses have already been deducted. If they have been reported in Box 8/9 they should be. 

 

Do note that capital losses can only be used to offset other capital gains. If there aren't enough capital gains, then only $3000 a year can be used to offset ordinary income.

 

Also there could be a passive income limitation at play here.

 

When you are a passive investor in an LLC (i.e. the LLC isn't one that you work in as  a job e.g. a landscaping business that you run), most losses from the LLC are considered passive. Boxes 8/9 are not. Passive losses in a given year can only be used to offset other passive income. Frequently one doesn't have enough passive income, so the excess passive losses are "suspended" and carried forward into the future.

 

When you dispose of ALL of your interest in the passive investment in a fully taxable transaction (i.e. sell/redeem your interests/shares or the investment LLC winds up (final K-1), then your prior year suspended passive losses are "allowed" in the year of disposition. That will show up usually on Schedule E though some can show up on Form 4797. 

In TT take a look at your K-1 form in forms mode (Desktop software) or perhaps the PDF in online (I don't use online so I'm not sure) and see "Section A" (generated by TT) for how the gain loss is split up and if it is limited by the passive activity rules.

 

Feel free to ask more if that doesn't make sense.

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