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Level 1
posted Jan 26, 2022 4:57:11 PM

Multiple rental properties purchased by LLC which later was dissolved

A two partner California LLC purchased 3 parcels of rental property in 2019.  This LLC was dissolved in 2020 and the properties were not sold but instead transferred to two separate Trusts owned by each respective partner.  In the individual tax return preparation (not the LLC return) Turbo Tax asks how the properties were distributed in the Interview section and the answer choices all involve sales.  How is this situation supposed to be correctly specified in Turbo Tax?  It appears to try to calculate a gain/loss from the LLC disposing the property, but there were no sales involved.

0 1 179
1 Replies
Employee Tax Expert
Jan 26, 2022 5:07:55 PM

It is trying to calculate the dispositions as sales for purposes of the LLC return.  You should dispose of the assets as a zero loss/zero gain transaction and then remember that the basis of the assets has transferred to the trusts at the exact same amount that it was in the LLC.