Where does it say to zero out my balance sheet for an LLC Final Return?

[bingcoin]

Final return was filed and now we are being asked to zero out the balance sheet on the tax return. Is this a thing with IRS? LLC made less than $250K and zero assets that were distributed in the K-1s.

[Vanessa A]

If the LLC is closed, then you would need to distribute the assets, as the LLC would not be able to hold the assets if it is no longer in existence.  

So, if you did have assets, you will need to go to the asset section to report that you disposed of your assets and how you disposed of them.  Your final return will include form 8594 with it to show how you disposed of the assets,  either by selling them or turning them into personal use.  

If the assets were retained earnings, you can just go to the distributions to owners and enter them there which will zero out the balance of any retained earnings. 

The disposals gain or loss on the disposition of the assets will then be reported on the partners K-1's.

Closing a Business