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Level 1
March 30, 2020
Question

How to enter final K-1 when there is no sale of partnership interest. However, partnership converted into corporation.

  • March 30, 2020
  • 6 replies
  • 29 views

Partners did not dispose off their partnership interest and and did not receive any sale proceeds. All their partnership interest is converted into corporation stock. This disposition is not taxable. Where is the option to check disposition not taxable.

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6 replies

Level 4
April 2, 2020

Just check the box for final K-1 but do not check any boxes regarding disposition. The disposition boxes generate the 4797, etc. which are not needed in this case.

This is not a disposition, it is a conversion.

Level 2
May 28, 2020

In ProSeries, I have check the box for a final k-1 since the LP converted to a corporation.  However, I am still getting the error asking about the disposition in Part II.  How do I get rid of these?

sjrcpa
Level 15
May 28, 2020

Unmark the final K-1 box. Next year, delete the K-1 from the pro forma.

The more I know the more I don’t know.