CPA needed for LLC K-1's?

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primetime5
Posts: 33
Joined: Mon Mar 21, 2016 9:28 pm

CPA needed for LLC K-1's?

Post by primetime5 » Tue Jan 14, 2020 10:47 pm

My tax situation is pretty straightforward except for the equity I hold in my company's LLC. I have bought shares at various times in the last few years and at various unit prices. One day the company will sell out and I'm not entirely sure I have a clear picture of how the taxation of this will take place. I have used both non-Q and Q funds to invest, but I understand that my cost basis can fluctuate based on K-1 losses/gains and actual distributions.

I guess what I want to know if people who have invested similarly did you use a CPA to manage this or is it simple enough to handle alone? I have been doing my own taxes for years so I have a decent understanding of other areas, just not this one. TIA

Spirit Rider
Posts: 12265
Joined: Fri Mar 02, 2007 2:39 pm

Re: CPA needed for LLC K-1's?

Post by Spirit Rider » Tue Jan 14, 2020 11:57 pm

I not sure I am following you. First an LLC is not a tax status, it is a state chartered legal entity that can file taxes as a sole proprietorship, partnership or S-Corp. Only the latter two can have ownership interests and file K-1s. The partnership or S-Corp should have clear records of ownership interests and should communicate that to you regularly. If you can't track your ownership interest yourself than professional assistance should be used.

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