Hi Rick,
The company sold was a C corp let’s call it Company A. The buyer was a foreign company. They bought the stock from my brother and I. The stock did not include the land or building so we set up an LLC to hold the land and building which we leased to Company A and it’s new owner. After several years the new owners had run Company A into the ground and it was loosing $$$ everyday so they asked us if we wanted it back. They offered to sell it to us for 1$. So we (The LLC) bought the “assets” for 1$. At this point the LLC owns the land and building and the assets.
After turning things around a new buyer wanted to purchase the land, building and assets. Since we owned the land and building (which had a basis) for over 20 years we sold the land and building. But we leased the assets to the new buyer for 16 months so we would pay capital gains instead of normal income taxes.
This was done with two installment sales. One for the land and building (2018) and one for the assets (2020).
I hope this helps clear things up.
I’m new to Turbo tax so I wasn’t sure how to set this up. I’ve since created two “other assets” accounts in quick books for the LLC, one for the land and building note and one for the assets note. The income from the two sales appears to flow through Turbo tax generating K-1’s to the owners of the LLC.
