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Final K-1 with carry-forward losses - partnership converted into corporation

Level 2

In ProSeries, how to enter Final K-1 when there is no sale of partnership interest. However, partnership converted into corporation and no disposition of assets.

Also how the partnership suspended carry-forward losses be keep tracked to offset future capital account gain since corporation doesn't issue K-1s?

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3 Comments 3
Level 14
Level 14

When you convert a partnership to a corp. you liquidate the partnership, and if you had suspended losses due to basis limitation I believe you lose the suspended loses

Level 15

I would not mark it final in  the software.

If they are passive losses, after you complete the return, keep track of them outside of the software for if and when client disposes of the stock. Delete the K-1 in next year's software.

Level 2

Thanks for the workaround solution.