How report 1099-S from the sale of LLC real estate

[ProStar]

In 2006 myself and 9 others formed an LLC and purchased a property, land with a dwelling. We sold the property at a loss in 2019. I received a 1099-S showing a gross proceeds of $13,097, my contribution to the LLC was $40,000.00; a loss of $26,903. The property was not rented at any time. What is the best way to report my 1099-S? Where do I make the entry in TT? The only area in TT that made little sense was in the Wage & Income/Business Items/Sale of Business Property where one of the questions Sales of Business or rental property. I am unable to find in TT a better or more correct way to report my 1099-S

[AlanT222]

Because this was a multi-member LLC, you must file a Form 1065 using TurboTax Business.  

Use TurboTax Business (Windows only) if you need to file a return for a corporation (Form 1120), S corporation (Form 1120-S), partnership or multi-member LLC (Form 1065), estate/trust income (Form 1041), or homeowner association (1120-H).

TurboTax Business doesn't cover personal (1040) returns, either with or without Schedule C.  Once the LLC properly reports the 1099-S, you will receive a K-1 for your share of the profits and losses.  

[ProStar]

Thank you AlanT222. Will TT Home and Business Mac work to file a 1065? Any direction on how to file 1065 once in to TT Business or TT Home and Business Mac?

[AlanT222]

Unfortunately, TurboTax Home and Business will not prepare a 1065.  Only TurboTax Business for Windows.  

[Critter]

Did you get a 1099-S with YOUR name on it and only YOUR portion of the sale proceeds ?  If so ALL the partners have problems ...  this sale should have only been reported in the partnership's name.  And the partnership return must be completed by 3/16/2020 before any of the personal returns can be completed.   Seek local professional assistance to get this mess corrected ASAP ... do not try this yourself. 

[Redheather]

Have the same issue.  3 member LLC w K-1s... flowing form 1065, sale of real estate on installment sale.  It looks like the LLC can fill out a 6252 for the installment sale, which flows to a D which flows to the 1065, second page line 8 or 9a (short term or long term).  Then through the k-1s, each partner gets ⅓ of income.

[Critter-3]

So the partnership has an installment sale to report each and every year it gets a payment until it is fully paid off.  The income will be passed thru to the partners by way of the K-1 form each year to enter on their personal returns.  

[Redheather]

Thank you...I am pretty sure the 6252 gives me the info I need to complete the 1065 and K 1s

[SEALEX]

Two questions.

The first is a similar question to the original post, I want to report the sale of LLC real estate, the only difference is I had a 1099-S issued for a "single-member" LLC.  How do I do that?

You see, I usually reported rental proceeds and depreciation etc for the property on a "personal joint" tax return, and now my 1099-S is issued with the LLCs name and EIN.  So where do I report it on my joint return?  I also figure cost basis will also be on those personal returns so I want it accurately matched  up.

I also don't want the IRS looking for a tax return to be fined under my LLC's EIN.  I want to be able to combine it if allowable.

Thank you.

[Critter-3]

A single member LLC that did NOT incorporate is a disregarded entity and the sale is reported  on the personal return on the 4797 or 6252 ... if you sold an ongoing rental then sell it off in the 
Sch E section of the program. 

[SEALEX]

Thank you Criter-3.  🙂 

Yes, I'll use 4797 thank you for educating me to that.  I found that I would use that with a non-installment sale since my sale was lump sum. 

My clarifying question is this.

If I don't have any rental income anymore that whole year of the sale, do I also end up using the Schedule E OR is that "only" used when I have rental income? 

Finally, is it a problem that the 1099-S was issued with the LLC EIN number on it, instead of it being issued to my social security number? Yes it's a disregarded entity, I know that rule, I just didn't know if I'd be able to add the LLC EIN inside of the joint return on the tax form.  Is this possible?  I don't want the IRS expecting a separate return under the EIN number since title issued the 1099-S to the LLC instead of to me.

Thank you. 🙂

[CC Investments]

I have a LLC for rental real estate. the property was sold during 2021.

1) Do I need to complete a 1099-S for the sale of  the property? or should I have received a 1099-S? I did not receive a 1099-S.

2) Do I still need to complete the 1065 for the LLC for the few months I owned the rental real estate? Do I still need to complete the depreciation for the property prior to sale?

3) Are there any other forms I need to complete for the LLC income filing? I saw a thread that mentioned a 4797(?).

[GeorgeM777]

Yes, for questions 1 and 2.  Generally, the person responsible for closing the transaction is required to file Form 1099-S. If no one is responsible for closing the transaction, the person responsible for filing the 1099-S is, in the following order: (a) the mortgage lender, (b) the transferor's broker, (c) the transferee's broker, or (d) the transferee.  However, you may designate the person required to file Form 1099-S in a written agreement.

Yes, you do need to file Form 1065 if your LLC is a partnership.  If it were not a partnership but were instead a LLC with yourself as sole owner, then your LLC would be considered a single member LLC (SMLLC) and you would not need to file a Form 1065 because a SMLLC cannot be a partnership (you need at least two persons to have a partnership).  

Yes, you would also need to account for the depreciation, not only to enter a correct basis, but also in the event there is some depreciation recapture that needs to be included on your return.  Remember to separate the cost of the land from the cost of the structure because you cannot depreciate land.  

Because Form 4797 is used to report the sale or exchange of real property used in a trade or business, such as your rental property, you will need to complete Form 4797. 

CC Investments