Tax implications after selling my small business - can TurboTax handle this filing?

12 TurboTax Home and Small Business should be able to handle the sale of your single-member LLC, but it depends on the complexity of your sale. Since your LLC was a single-member entity, it's treated as a disregarded entity for tax purposes, meaning the sale is essentially reported on your personal return. TurboTax does have sections where you can report the sale of business assets. You'll need to enter information about your basis in the business, the sale price, and any depreciation recapture. The program will walk you through Schedule D for capital gains and Form 4797 for the sale of business property. That said, business sales can get complicated depending on how the deal was structured (asset sale vs. entity sale), if there was goodwill involved, or if you had depreciated assets. If your sale was straightforward with minimal assets or complications, TurboTax might work fine. If it was more complex with multiple assets, allocation issues, or installment payments, you might want professional help.

19 After selling my online shop last year, I tried figuring out TurboTax for this but ended up super confused. Then I found this service called taxr.ai (https://taxr.ai) that was actually incredibly helpful. You just upload your sale documents and it breaks everything down in plain English. It showed me exactly what forms I needed and where in TurboTax to enter everything. With a single-member LLC sale, there's all these questions about asset allocation, depreciation recapture, and Section 1231 vs capital gains that made my head spin. The service explained what portion was ordinary income vs. capital gains, which saved me thousands. Might be worth checking out if you get stuck!

8 Just wanted to update - I used taxr.ai after seeing the recommendation here and it was surprisingly helpful. I uploaded my purchase agreement from when I sold my small contracting business and it immediately identified that I had incorrectly classified some of the sale components. It explained that I needed to split the sale between goodwill (capital gains tax rate) and a non-compete agreement (ordinary income tax rate). Then it guided me to the exact screens in TurboTax where I needed to input each piece. Would have completely messed this up otherwise and potentially paid thousands extra. Really worthwhile for anyone selling a business!

15 If you're dealing with IRS forms for a business sale, you might also run into questions that TurboTax can't easily answer. I spent WEEKS trying to get through to the IRS last year about a business asset sale question. Finally found this service called Claimyr (https://claimyr.com) that got me connected to an actual IRS agent in about 15 minutes instead of waiting on hold forever. They have this weird but effective system that keeps calling the IRS for you until it gets through, then calls you to connect. You can see how it works here: https://youtu.be/_kiP6q8DX5c. Saved me so much frustration when I needed clarification about how to report the sale of business equipment with depreciation recapture.

3 I was totally against using Claimyr when I first heard about it. Thought it was ridiculous to pay for something I could do myself. But after spending THREE DAYS trying to get through to the IRS about my business sale questions last month, I broke down and tried it. Not gonna lie, I was shocked when they actually got me through to a real person in the business tax department in about 20 minutes. The agent walked me through exactly how to report my business sale with allocated assets, and it turned out I was about to make a huge mistake on my covenant not to compete reporting. Saved me way more than what the service cost. Hate to admit it, but sometimes you gotta pay to save time and get things done right.

11 Have you considered using a CPA just for this year? I sold my retail business in 2024 and decided to use a CPA instead of TurboTax even though I'd been using TT for years. Honestly, it was money well spent. The CPA found several ways to structure the sale reporting that minimized my tax liability - things I definitely would have missed in TurboTax. She also helped me understand what documentation to keep in case of an audit. Business sales raise audit flags more often than regular returns, so having professional backup gave me peace of mind.

22 Does anyone know if selling a single-member LLC has different tax implications than selling a partnership or corporation? I'm selling my website development business and trying to figure out if I need different forms than what people here are mentioning.

I went through something similar when I sold my marketing consultancy last year. TurboTax Home & Business can definitely handle single-member LLC sales, but there are a few things to watch out for. The key is getting the asset allocation right in your purchase agreement. Since you mentioned it was mostly goodwill and client list, make sure those are clearly separated in your documentation. TurboTax will ask you to break down the sale price by asset type - goodwill typically gets capital gains treatment (which is better), while things like non-compete agreements are taxed as ordinary income. One thing that tripped me up was depreciation recapture. If you claimed any business equipment depreciation over the years (computers, office furniture, etc.), you might need to "recapture" some of that as ordinary income even if the actual sale amount for those items was minimal. My advice: start with TurboTax since your sale sounds straightforward, but don't hesitate to consult a CPA if you run into any confusing allocation questions. The software will guide you through Forms 4797 and Schedule D, but having your purchase agreement handy with clear asset breakdowns will make the process much smoother.