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Where do I list proceeds from multi partner llc liquidation with sale of non revenue real estate property in the business income or final distribution section of the K-1?

Forum|Forum|7 years ago
June 5, 2019
3 replies
31 views

The property as held for 11 years and never used for income other than a long term investment with just periodic maintenance visits.

TurboTax Business Windows

Best answer by Rick19744

If the property was sold to a third party, then you reflect the sale on the 1065.

If this was never used in the trade or business and never depreciated, then you would use Sch D and the applicable form 8949.

If audited, the IRS may question the lack of depreciation. The issue here is the IRS "may" want to reduce the basis of the property by depreciation not taken. The reason for this is the basis of property is reduced by "allowed or allowable". I only bring this up so you can make sure you document your case that this was not business property and was merely held for investment and never placed into service.

Answer

Level 13

If the property was sold to a third party, then you reflect the sale on the 1065.

If this was never used in the trade or business and never depreciated, then you would use Sch D and the applicable form 8949.

If audited, the IRS may question the lack of depreciation. The issue here is the IRS "may" want to reduce the basis of the property by depreciation not taken. The reason for this is the basis of property is reduced by "allowed or allowable". I only bring this up so you can make sure you document your case that this was not business property and was merely held for investment and never placed into service.

*A reminder that posts in a forum such as this do not constitute tax advice.Also keep in mind the date of replies, as tax law changes.

Level 13

Welcome

*A reminder that posts in a forum such as this do not constitute tax advice.Also keep in mind the date of replies, as tax law changes.