I received a distribution of my equity interest in an LLC. I did not receive a K1 or a 1099 form for this distribution. Where do i record the LT capital gain?

Forum|Forum|4 years ago
February 27, 2022
2 replies
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Is this a dividend distribution or is it treated as a partnership distribution? I am unclear where to record it in turbotax

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Anonymous_

Employee

Have you computed your basis? Does the distribution exceed your basis?

@Rick19744

karuleAuthor

The distribution definitely exceeds the basis so there is a capital gain event. I am just not clear if this goes in the partnership section of income or if it is part of a dividend distribution or something else - i did not receive a 1099 or a K1 from the employer so it is unclear to me. I appreciate any thoughts or guidance folks have on this question.

Rick19744

Employee

We need more information in order to provide some guidance:

How long have you had your LLC interest?
Have you received any K-1's in the past?
As @Anonymous_ requested, have you maintained your tax basis in this LLC interest?
Would you expect to receive a K-1 this year?
- The LLC return is not due until 3/15 and even then can get an extension
Did the LLC terminate or liquidate?

*A reminder that posts in a forum such as this do not constitute tax advice.Also keep in mind the date of replies, as tax law changes.

karuleAuthor

These were restricted units in the LLC that vested over a period of 21 months (similar to restricted stock in a public company) and paid out upon my leaving the LLC for another employer. I have never received a K1 in the past. The LLC is still active and operating.

Rick19744

Employee

Without many facts, my best advice would be to treat this similar to owning a stock.

I'm not clear on how you determine your tax basis (cost) if you never received a K-1.
Did you receive a W-2 for any compensation?
- If "yes", was there ever a value placed on the units?
- Was this value included in your W-2?
If you never received a K-1, it doesn't sound as if you were ever truly a member of the LLC
If you have a value for your cost basis, then as noted above, just use this figure as you would any other equity and then your "distribution" would be your selling price.
This information would go on form 8949 and Schedule D

*A reminder that posts in a forum such as this do not constitute tax advice.Also keep in mind the date of replies, as tax law changes.