Question

Transferred an interest to a revocable trust and received 2 K-1s

Forum|Forum|2 years ago
March 14, 2024
1 reply
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HI. I transferred a few LLC interests to a revocable trust mid-year and I received 2 K-1s, one in my individual name and the other in the name of the trust. I presume income and losses was apportioned between the 2. I think I should add up the numbers in each line item and input them that way into TT. Is that correct?

If so, will it get flagged by the IRS? I'm concerned the IRS will be notified that I received 2 K-1s from the issuer but only 1 is reported on TT.

Any thoughts or suggestion are appreciated.

R

RobertB4444

I don't think it's a worry. The IRS has the numbers and they'll match the totals. But if you are interested in being very careful just enter them as two different K-1s from the same source. Then they'll be listed separately on your schedule E.

@MDR11

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M

MDR11Author

Thanks. I realized that that the K1 in my individual name is marked as a final K-1 so I think I should definitely enter them separately. I'm now wondering if the program will require me to indicate what happened to the partnership/interest (i.e. if I have to mark that it ended or my interests were sold, etc.). All that happened was that capital was transferred (and that is indicated in the notes of the K-1) but that's not an option in the program.

R

RobertB4444

If you have to enter it as a sale then enter that you sold it for exactly your basis. That way there is neither a loss or a gain and it just goes away.

@MDR11

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