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Level 3
May 15, 2021
Solved

Client received K-1 with multiple state K-1s attached for a stock sale distribution

  • May 15, 2021
  • 3 replies
  • 19 views

The client received a 1099-B with company stock sale w/o basis and a Sch K-1 showing same amount in the box 19A distribution. Is this amount taxable to the several state K-1s' that came with the Federal K-1 as non-resident Capital Gains income if taxable to each particular state?  

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Best answer by Taxes-by-Rocky

Christine, not sure if you are referring to a PTP transaction.

See instructions to Box 19A (distribution of marketable securities).

Partner's Instructions for Schedule K-1 (Form 1065) (2020) | Internal Revenue Service (irs.gov)

Does your partner have a gain from the sale or exchange of their partnership interest....requiring a look through for hot assets, etc.?  Some states might tax such gain/income.

3 replies

Taxes-by-Rocky
Level 7
May 15, 2021

Christine, not sure if you are referring to a PTP transaction.

See instructions to Box 19A (distribution of marketable securities).

Partner's Instructions for Schedule K-1 (Form 1065) (2020) | Internal Revenue Service (irs.gov)

Does your partner have a gain from the sale or exchange of their partnership interest....requiring a look through for hot assets, etc.?  Some states might tax such gain/income.

Level 3
May 15, 2021

Yes, Rocky this is it. There's no basis, all gain. Just hoping to avoid the state taxes on top of it. Thanks for your help.