Question

Sale of LLC (taxed as Scorp) Membership Interest

Forum|Forum|5 years ago
April 8, 2021
2 replies
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In 2020 I sold my interest in an LLC taxed as an S-corp. How do I enter this in Turbo Tax?

I was 50% owner, and sold all of it.

TurboTax Self Employed Online

Carl11_2

Employee

You "should" have received a "final" K-1 showing your disposition of your interest in the S-Corp. Did you?

C

cpczyzAuthor

I received an K1 (1120s) but it just reflects the business income for the portion of the year of ownership (12.5% of year).

DaveF1006

It depends. This would considered a sale of a capital asset and would be reported in this manner. In this example, the membership interest is reported like a stock in this instance because it is considered a share or a piece of the S-Corp.

Log into or open Turbo Tax
Go to federal>wages and income>investment income>stocks, mutual funds, bonds, other
Select No you did not get a 1099-B for this transaction
Next screen will ask the sale information for your membership interest such as description, date sold, date acquired, sales proceeds, cost (meaning what you paid for it) Holding period. This determines long term or short term capital gains. If you owned the membership more than one year, it's long term.
Next screen you can skip unless you paid federal withholding tax or if those other items apply.
Then finish out the section to complete the reporting.