Turbotax Business : Gain, Loss, K-1

[amyonghwee]

We (mainly 2 partners)  set up a LLC (formed in WY) in Mar 2023 and operating in UT.  This LLC is involved in stocks/options trading and no sales/resell activities. Since Dec 2023, we have lost about $13k.

In turbotax business, there is a field asking gain in % and loss in %. Any advice on filling this ?

We have no distribution. Do we still need to issue K-1 to the partners ?

[PatriciaV]

The gain/loss percentages under Partner/Member Info in TurboTax Business are used if the members are allocated gains differently from losses. If this doesn't apply to your LLC, you may leave those boxes blank.

Yes, you must file a tax return for your LLC since it was in business during the year. A complete tax return includes Schedule K-1 for all members. Realized income (or loss) should be allocated to the members according to your operating agreement and reported on Schedule K-1, even if you had no distributions for the year.

Note that any decreases in the value of stocks held and not sold are unrealized losses that are not reported on Schedule K-1.

[amyonghwee]

@PatriciaV 

I left the gain and loss as it is... that is 0%.....

Running error check, error message appears below:

Schedule K-1 Worksheet : Tot End of Year Loss % does not equal 100%. Adjust one or more partner's loss percentage so that the total of all partners equals 100%

Schedule K-1 Worksheet : Tot End of Year Profit % does not equal 100%. Adjust one or more partner's profit percentage so that the total of all partners equals 100%

I have the latest Turbotax Business update as of 1/22/24.

Is this a turbotax error?

[PatriciaV]

You may need to revisit the Partner/Member Information section to be sure you entered percentages for income allocation, not a special allocation. In most cases, both gain and loss percentage would be the same, and each total for all partners must be 100%.

[amyonghwee]

@PatriciaV 

Thank you!

[amyonghwee]

A quick question on which state should I file returns.

YNB LLC is formed in WY LLC and has mailing address/bank accounts address using Utah address. As this is used for trading, which is online trading, should I be filing Utah  returns and NOT Wyoming state ???

[PatriciaV · Accepted solution]

If your business operates in Utah, then you would file a Utah State income tax return. 

Note that Wyoming has no income tax, so no tax return is due to that state. However, you may need to file an annual report and pay filing fees for your LLC registered in Wyoming. Most LLCs have an agent in Wyoming to handle this filing.