When you sell an LLC interest that you inherited, you typically benefit from a "step-up" in basis, meaning the value of your LLC interest is adjusted to its fair market value (FMV) at the time of your mother's death. Here’s how to report the sale:
- Determine the Stepped-Up Basis: The stepped-up basis is the FMV of your 5% LLC interest at the time of your mother’s death, established during probate. This value becomes your adjusted cost basis.
- Calculate Your Capital Gain or Loss: Subtract the stepped-up basis from the sale price of your 5% interest to calculate your capital gain or loss
- Report the Sale on Your Tax Return:
- Log into TurboTax:
Open your return in TurboTax Premier or Self-Employed, as these versions support investment and business income reporting.
- Go to the Income Section:
- Scroll down and click on add Income
- Then search Investment Income" and select "Stocks, Cryptocurrency, Mutual Funds, Bonds, Other."
- Go back to Income and click Investment Income
- Then select enter a different way
- Enter Information and add sales."
- Select "Other Sale" to report the sale of your 5% LLC interest and Enter Sale Details:
- Continue through the questions.
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