You are not required to report the death of an LLC member to the IRS. However, you will have a change in ownership for the year they died.
- Open your return in TurboTax Business.
- Under Business Info >> About Your Business, click Edit for the last line "Has an Ownership Change."
- For the deceased member under Partner/Member Information, check the box for "This member left the company this year." This choice marks the related K-1 as final.
- Member Percentages for the deceased will be unchanged for the beginning of the year and zero at the end of the year.
- Each current Member who was affected by the loss of the deceased will have change in their ownership percentages at the end of the year.
- Continue from the list of members to the page "Basis Adjustment." Check the "yes" box. If the LLC revoked the Section 754 election, check the box for this as "yes." Otherwise, check "no" and enter the effective date. (See the blue Explain This link for information about Section 754.
There may be other areas of the return you will need to revise to adjust the current members' accounts for the change in ownership. You may need to use Forms Mode to review and/or edit this information.
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
