How to properly recorded the acquisition and disposition of an out of state property take back in foreclosure in an single member LLC

[Nillabeam]

There are a few questions in this current tax situation.

• My single member LLC owns 50% of a property that was taken back in Foreclosure.
• Meaning, my LLC did the foreclosure as the borrow stopped paying.
• This property is located in a different state than my LLC. The property was never rented and it was sold in 2024.

Since this property was not rented this should be entered into the Business Asset Section which would also flow to the sale of a business asset. Turbo Tax recommends to not enter this property in the rental section since it was not rented.  

Questions

There is no section to say that my LLC only owns 50%. Is it correct to enter all values (cost basis, total exp/costs, and sale price) at 50% of the total value?

The category options doesn't seem to 100% match a foreclosure, I selected Qualified Improvement since it was the closest match. Are the other options that can be generated?

The property was sold at a loss. Will this still require to file taxes in the state the property was sold as a loss?

As a single member LLC, would the LLC file business set of taxes out of State even it will flow to the individual?

Thank You for the help everyone.

[RobertB4444]

You can enter exactly 50% of all of the costs and income.  That will get the correct amount entered.

No.  Just pick the option that you like.  It won't impact this transaction.

That kind of depends on the state.  But to start with just know that the only way that anyone can know that you lost money on the sale is for you to tell them.  As far as the state goes it looks like you made a profit of 50% of the sale price.

Your out of state tax return should match your federal tax return.

@Nillabeam 

[Nillabeam]

Thank you for the reply. Just to make sure I'm covering everything.  When you say:

"You can enter exactly 50% of all of the costs and income.  That will get the correct amount entered.", does Turbo Tax have a way or a check box that my company owns 50%. My thought/concern would be this could be interrupted as the entire value viewed as the 50% number.

"No.  Just pick the option that you like.  It won't impact this transaction.", Doesn't this generate the depreciation questions? This asked questions and flagged the Special AMT for Depreciation and prior Depreciation amounts. Both of which a $0 value was entered for.

I agree the Federal and State should match. Never had to enter taxes for this state in the past but I'm sure the software will guide me though it without issues.

Thank you again. 

[RobertB4444]

Entering 50% of the value is how you show that you owned 50%.  Assumedly the other owner will also enter their 50%.  If the IRS has questions they will reach out so maintain your documentation.

It does generate questions.  But zero is a perfectly acceptable answer.

@Nillabeam