XavierP
Level 1
‎01-29-2024 05:52 PM

Hi Everyone, I have a client that received K-1's from an SPV, AngelList that has some QSBS capital gains. Per AngelList, the SPV itself is not QSB, but the underlying portfolio company is section 1202.

I am trying to figure out how to record it. I don't know if it would be a good idea to remove the capital gains from the the K-1 entry and record it directly on Form 8949. Then I can make the stock qualify for section 1202. 

Do you guys have a better idea?

Thanks a lot.

0 Cheers
PhoebeRoberts
Level 11
Level 11
‎01-30-2024 12:43 PM

Bear in mind that your client has to have owned the K-1 entity for a qualifying holding period, too. 

I back it out of the K-1 input and enter it as a separate Sch D transaction, then make some entry (can link the Sch D sometimes, or just make an Other Adjustment to Basis in the K-1 input) to get the K-1 basis right.

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XavierP
Level 1
‎01-31-2024 12:58 PM

Thanks a million!