I have a "Flip" residential property which we had to walk away from in 2019. The house was purchased for $150K in LA under and LLC with Do Hard Money a Utah based LLC, as the other member. The remodel was was completed with ~$52k of rehab as part of the original loan. Owner equity is about $51K as we added our own money to the project to complete all the work.
The project was completed and listed for sale where it sat for months unsold. Rather then continuing to dump more money into this to carry the property (mortgage etc..) we had to walk away from the LLC and give it all back to Do Hard money under a forbearance agreement, so they now own the property 100% as we gave up our interest in the LLC.
The property was treated as inventory for a flip and normally I would just treat it as a sale in my quickbooks accounting. But Im not sure how to treat walking away from our interest in this company in quick books and then Turbo tax. Can you provide some basic guidelines on how to best capture all of these losses.
