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?
Solved! Go to Solution.
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.