EFCPA
Level 1
02-05-2021
11:49 AM
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The final K-1 in 2020 for the partner shows a negative balance of 35,000, which resulted from distributions taken in excess of income allocated to the partner. Is this reportable as ordinary income on the partner's 2020 1040?
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sjrcpa
Level 15
02-05-2021
01:14 PM
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Distribution in excess of a partner's basis are taxable capital gain. The sale of a partnership interest is part ordinary income and part capital gain.
Which do you have?
Ex-AllStar
