here2learn
Level 2
10-14-2020
06:56 PM
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Hello everyone!
i am working on a 1040 return where the k1 has distributions in excess of basis. I am taking the excess amount as LTCGs. I was wondering if i can take the same amount as "contributions to basis" since that amount is being taxed?
Thanks for your time.
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rbynaker
Level 13
10-14-2020
09:49 PM
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Indirectly that's already what you're doing. Say you have a $10K distribution in excess of basis. Normal distribution rules would have you deduct the $10K from the basis of $0, leaving you with a basis of -$10K. By correctly reporting this on Schedule D, you are adding $10K to the basis of -$10K to bring it up to $0.