Distrubiting all assets of a LLC to one of the Partners

Forum|Forum|3 years ago
February 16, 2023
3 replies
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Husband and wife in non-community property state (Florida) distributed rental house asset from LLC to Husband. The rental property was the only asset in the LLC and upon distribution, the LLC was disolved. This occurred at the end of December 2022. How is the distribution to just ONE member of the LLC entered in Turbotax such that both partners' Capital Accounts are zero at the end of the year?

The net rental income was split 50-50 and just the property distribution was 100/0 to husband.

TurboTax Business Windows

Carl11_2

Employee

RobertB4444

You'll enter property and cash distributions in the "partner information" section of TurboTax. Adjust the distributions to reflect that only one partner received the property distribution.

@palbert1

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Mike9241

the only way to zero out both capital accounts is to transfer the balance in your capital account to his.

this would be a gift between spouses so no gift tax reporting would be required. if you don't do this you will have a balance showing up on the k-1 while your spouse will have a negative balance. this could and I stress could increase audit risk.

in schedule L on the K-1 I would use the other increase/decrease line