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ptax255
Level 6
May 9, 2021

LLC Dissolution, reporting on personal tax return

  • May 9, 2021
  • 2 replies
  • 14 views

Hi, what's the best way to report this and which forms:

Client formed LLC with another person in 2020. They had start up costs of ~$10K

LLC was dissolved, and my client received $45K to give away IP rights.

In the process had some legal consultation fees paid. 

All this happened within one year. 

 

Thanks!

 

This topic has been closed for replies.

2 replies

IRonMaN
IRonMaN
Level 15
May 9, 2021

1065

Slava Ukraini!
    P
    ptax255Author
    Level 6
    May 9, 2021

    I should clarify a few things:

    - My client received $45K from the other member after LLC was dissolved.

    - Legal fees were paid by him.

    There was no 1065 filed for the LLC.

    sjrcpa
    sjrcpa
    Level 15
    May 9, 2021

    Jeff's point is that a 1065 should be filed.

    Did the LLC sell its assets and then distribute money to the members?

    Or did your client sell his interest in the LLC to the other member?

    The more I know the more I don’t know.
      P
      ptax255Author
      Level 6
      May 9, 2021

      The LLC was dissolved. There were no assets. The other member paid my client $45K to give up any rights in regards to the software they created. The other member created a new LLC.

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