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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?
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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.
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So, we need to report $119 excess distribution through long-term capital gain in Sch D?
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Distributions in excess of basis do go on Schedule D, yes.
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thanks.
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Is it true also, if the final year of Ptrnshp, Partner's Neg capital balance can be reported on his or her's Sch D as LTCL?