It depends. This would considered a sale of a capital asset and would be reported in this manner. In this example, the membership interest is reported like a stock in this instance because it is considered a share or a piece of the S-Corp.
- Log into or open Turbo Tax
- Go to federal>wages and income>investment income>stocks, mutual funds, bonds, other
- Select No you did not get a 1099-B for this transaction
- Next screen will ask the sale information for your membership interest such as description, date sold, date acquired, sales proceeds, cost (meaning what you paid for it) Holding period. This determines long term or short term capital gains. If you owned the membership more than one year, it's long term.
- Next screen you can skip unless you paid federal withholding tax or if those other items apply.
- Then finish out the section to complete the reporting.
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