Drphibes
Level 7
08-07-2022
01:33 AM
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Agreed, talk about a timely subject.
I have a brand new client who was on extension due to 13 partnership K-1's where the partnerships went on extension. He is a limited partner, these are not publicly traded partnerships (all have to do with apartment complexes). The K-1's have come in and about 1/2 have negative capital accounts but have amounts for recourse, non-recourse, and qualified recourse loans. He is receiving cash distributions as reflected on the K-1.
Do the recourse and qualified recourse and non-recourse loan amounts (or some combination) count towards basis for determining if the cash distributions are taxable gains or not. I would think non-recourse would not count. Thanks is advance!!