Transferring condo sale to California return

[jbinsantamonica]

I own two California single member LLCs. One of them in 2025 sold a rental condominium it owned. I think I entered the sale incorrectly for the purposes of TurboTax Home and Business handling it the right way. I  manually entered an enterable 4797. But that failed to transfer the income to that LLC's 568 for California, and as a result of that, didn't show that I needed to pay some money as a result of the capital gains on the sale. So I'm thinking I should delete the 4797 and go back to the Federal asset worksheet for that LLC and in the section where it says disposition, fill all that in. Is that correct? If so, I'm wondering why it divides up land and property since I sold both of them together.

[MonikaK1]

Yes, you should delete the form 4797 that you entered directly. Users should enter all information needed for calculations in the TurboTax interview (step-by-step for Desktop users) in order to help ensure accurate results. Entering information directly into forms could invalidate the  100% Accurate Calculation Guarantee  as you may miss important information included in the interview.

Fill out the information about the condo sales in the Federal section. See this help article for further instructions on reporting the sale of a rental.

A rental property owned by a single-member LLC (SMLLC) is typically reported on Schedule E (Form 1040), as the IRS treats it as a "disregarded entity". 

Regarding California Form 568, Limited Liability Company Return of Income, if this is for a single member LLC, TurboTax will normally create Form 568 based on the answers to the questions entered in the Schedule C or E section and in the California interview as long as the activity was identified as a SM LLC. 

Once the form is generated and populated from the interview questions, to make additional entries on California Form 568, such as the employer ID number, you can then switch to Forms mode by clicking on Forms at the top when you are in step by step. Click on Open Form at the top of the list of forms, then enter "568" in the entry field that appears.

Form 568 can either be e-filed or mailed to:

Franchise Tax Board

PO Box 942857

Sacramento, CA 94257-0501

The TurboTax forms availability tool indicates that Form 568 is supported for e-filing but Form 3522, the payment voucher, is not. Schedule K-1 (568) is not supported for e-filing.

[jbinsantamonica]

Thanks for your detailed reply. I appreciate your heads up about possibly invalidating the guarantee. Still, I'd probably prefer to use forms as I've been doing for many years.  So I would greatly appreciate it if you could please tell me what form I would start entering the sale in after I delete the 4797. 

[jbinsantamonica]

I tried the interview and I remember I did try it before. It asks a bunch of questions that lead it to delete the asset from the return completely which is not what's supposed to happen. I find the interview process cumbersome and many of the things that it asks me are vague and I don't know how to answer. So can someone please confirm to me that in forms I should enter it on the asset entry worksheet under the disposition section to start things off? Thanks.

[MonikaK1]

The entire rental activity, income and expenses, and asset being depreciated and sold, should be entered in TurboTax for a disregarded entity so that the income and expenses will appear on Schedule E and the sale information will appear on Form 4797 / Schedule D as appropriate. 

All of this should be done in Interview / Step-by-step mode so that all of of the relevant questions are answered. See this help article for information on entering the income and expenses.

You can also import information from Quicken or QuickBooks if applicable. There is a screen in the interview for that.

If you would like assistance with the interview, see this help article for information on how to get a live session with an Expert. 

@jbinsantamonica