Please for Final 1065 from members withdrawal, 1 member with the LLC which owns a rental property, which form instead of 4797 because no sale or exchange took place?

[M-MTax]

What happened? More information is needed. Was this a single member LLC or multi member?

I'm guessing it's a multi member LLC but how many members are there now and what was distributed? 

[fgroup1492]

Hello, yes the LLC is now since Dec 2023 a single member LLC, (sent form 8832) and on my taxes I did Schedule E for the rental income and expenses, but one accountant told me I needed to do the final 1065 since a "partnership" doesn't exist any more. Other accountant told me since the operation continues no final 1065 was needed...It is confusing...

But the rental property continues under the LLC.

Since it is a final 1065 the software generated a 4797 as "property sold or exchange, or conversion", but this did not happened.

On Schedule K, for me the single member it shows a loss on #10 "net section 1231", but I don't want that to be generated since no sale took place, and I don't need the losses and then a big gain when its sold in the future!

Distributions on #19 are according to the balance sheet.

Thanks for your help!

[M-MTax]

See https://accountants.intuit.com/community/lacerte-tax-discussions/discussion/partnership-llc-becomes-...

But the question remains as to what happened to the other member? A buyout of the interest by you?

[fgroup1492]

They just voluntarily withdraw according to the operating agreement, they only had disallowed losses.

[M-MTax]

The LLC owns rental property and the only other member withdrew? They may have only had passive losses but what happened to their capital contribution? What happened with their share?

[fgroup1492]

Hi, thank you. There were 3 members and 2 of them contributed just $1000 many years that were lost with the losses.

I am the only member that remained and the only one with a positive tax basis, remained with 100% of the LLC as a single member LLC, that is why the cash remaining and property are distributed to me according to books.