Welcome back! Ask questions, get answers, and join our large community of tax professionals.
cancel
Showing results for 
Search instead for 
Did you mean: 

taxpayer's final K-1 has negative ending capital

hgtc
Level 4

Taxpayer received final K-1 (limited partner) that have negative ending capital balance.  Taxpayer did receive $119 distribution during the year.  But, Partnership was sold and he did not receive any residual from the buyer.

1. do I report $119 as capital gain distribution?  If yes, where to input this?

2. do we need to report ~$3k negative capital as gain?

 

Labels (1)
0 Cheers
1 Solution

Accepted Solutions
PhoebeRoberts
Level 9
Level 9

Distributions in excess of basis do go on Schedule D, yes.

View solution in original post

4 Replies 4
PhoebeRoberts
Level 9
Level 9

You just run everything through the usual basis calculations. Your guy likely has distributions in excess of basis and/or losses suspended for lack of basis.

Capital account is not necessarily indicative of basis.

hgtc
Level 4

So, we need to report $119 excess distribution through long-term capital gain in Sch D?

0 Cheers
PhoebeRoberts
Level 9
Level 9

Distributions in excess of basis do go on Schedule D, yes.

View solution in original post

hgtc
Level 4

thanks.

0 Cheers