I am having a trouble figuring out what to do in Turbo tax to properly account for my actual gains after LLC rental house assets were sold and all funds dispersed to owners. The K-1 does not account for the cash that was returned, that might be normal, but I dont know if I need to enter a separate sale of asset to reconcile everything.
History: My Grandpa died in 2000 and left his house a couple lots from the beach to my Dad, and two Aunts at 1/3 each. In 2005, they made it into a vacation rental, and took their share of the tax consequences on schedule C each year.
My Dad died of cancer on 3/20/2016. My Mom, with good intentions, declined to inherit it, so it passed on to my sister and I at 1/6 each plus 1/6 of the operating funds. The assigned fair market value for my 1/6 was $55000, and also my dads share of the operating fund that amounted to $2500-3000 range after loans from partners were taken out.
In 2017, everyone thought it would be a good idea to form an LLC and it was born on 9/03/2017. Now in 2020, my managing Aunt decided it was time to let it go and living far away, my sister in I had no means to operate it even if we could buy it out from my aunts. This lead to the sale of the home, dissolution of the LLC, distribution of remaining funds, and a final K-1.
My K-1 shows a minor loss from rental (box 2 -$49, covid didn't shut the summer single home vacation rental market down as much as we thought it would), Box 9c unrecaptured 1250 gains *stm $7,427, Box 10 Net section 1231gains $9,821, and box 20 other info code L see k1_179 L $8808. When I do my best to enter it all, it comes up with a sale of business assets in excess of $18,000 in turbo tax. It seems like the majority of the gains come from depreciation prior to when I even owned part of the house, in which I had no depreciation. I certainly never took any 179 deductions as the house was put in service in 2005.
I put almost $58,000 in, and only recieved $66,820, plus a total of $1600 in tax loss deductions over the last 4 years of operation. I figure at most I should have around $10,000 gain.
The group sale report show about 45,000 in depreciation, but about $31,000 of that was before we owned our shares. It only shows 5,000 depreciation from my sister and I's 1/3, yet the totals are summed and I was given 1/6 of the gain. Also the 179 disposition statement seems say I claimed over $7,000 in passthrough depreciation, but I never did.
Do I enter a capital gains entry to reconcile everything on a personal basis? Can I edit the section 179 asset disposal worksheet to get rid of that depreciation or take the deduction now to offset it?
My main goals are to 1) Stay out of jail 2) not have major issues if audited 3) report accurate gains especially because the difference between what I think I gained and what turbo tax is saying means a difference between a family of 5 getting most of the 3rd stimulus to getting nothing, plus reducing stimulus 1 and 2 rebates since our income was a little higher in 2019.
