In general if there is a gain or loss for the partner on final distribution of a partnership it is based on Partners actual basis (initial /additional investment & distributions) and money/assets received upon distribution.  The basis showing on K-1 is often different than the partners actual tax basis.  One example of different basis is if the partner inheirted the Partnership Interest.  Partnership Interest can also be sold for more or less than than the K-1 basis and partner reports what they received from sale.

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