LLC Abandoned

[GTnHelena]

I contributed 20k to an LLC in 2009.  Over the years the capital account has been going down and this year it has gone to zero as a result of abandonment of partner capital.  I am a passive investor and assume that the partnership is now ended.  I haven't been able to figure out how to enter that on my 2020 return in TurboTax Premier.  It asks for the sale price, etc.  Do I show a net loss of the current capital decrease or of the total capital loss over the years.  TurboTax has kept track of my unallowed carryover passive losses which are now some 17K.  This year's capital decrease to get to zero is 1.7K.  Not clear what to put in for sale price and basis.  It appears I should end up with about 19K in losses this year to offset capital gains.

[JeffreyR77 · Accepted solution]

Each year that there was a reduction in your capital account until it reached zero should have resulted in a deductible loss on your personal tax return. 

At the point your capital account reached zero, you were no longer allowed current year deductions, your losses would be carried over until there were be positive income to offset the losses. 

Upon the abandonment of the LLC, you are able to write off your carryover losses  on Form 4797. 

The Sale Price would be Zero. The Basis will be the remaining nondeducted loss amount

[GTnHelena]

Thanks, I think that worked.  We'll see after the IRS gets hold of it 😉