On the 2019 K-1, my client showed a final capital account of $843,443.  The the new rules changed, so the beginning capital account on his 2020 K-1 showed ($47,249).  This was the year he had his final distribution of $843,443 - the same as his ending capital account on the '19 K-1.

I'm baffled.  The ending capital account on the 2020 K-1 reflects this distribution and shows a final  capital account of ($890,688).  Box N on this 2020 K-1 report the beginning share of net unrecognized section 704(c) gain of $871,991 and an ending gain as simply and empty line _________.

Last year he had a distribution of $314,700.  He started his capital account that year at $446,963, added $711,180, minused out the $314,700 distribution and arrived at $843,443 ending capital account..

If I go with the new capital account of ($890,668), I assume I have to report this as a positive gain on Schedule D with a $0 basis.  Or, if I use the unrecognized gain, I'd report $871,991 as the gain.  But, if I resort to the final capital account basis pulled in from 2019, I'd have no gain. 

I did some research, even read one of the answers from an earlier question on negative basis.  But I just can't find anything definitive on how to respond the the new capital account reporting for partnerships.

Any links to a definitive answer, or an answer from a colleague here will be very much appreciated.

Michael Rudy, EA, CFP