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- selling an LLC interest - effect on K-1
selling an LLC interest - effect on K-1
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debbieweir
Level 1
03-11-2021
11:26 AM
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The original two members of an LLC that files as a partnership sold their total interest to a different LLC that also files as a partnership. The sale took place in July 2020.
The partnership will report using the interim closing method, whereby the two original partner's activity through the July closing date will be reported on the K-1, which will be marked as final.
The question is - are their capital accounts closed out to zero on their final K-1s, or do their capital accounts reflect their ending balances (prior to their leaving the partnership), for purposes of calculating their gain (or loss) on sale on their individual returns.
Thanks in advance!
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IntuitAustin
Intuit Alumni
03-15-2021
09:50 AM
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Thank you for your question! Since this is a tax advice question, we’ve moved it to our product discussions board for discussion among your peers.
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Cheers!
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**Mark the post that answers your question by clicking on "Accept as solution"
