Disposal of a publicly traded partnership

[kindracpa]

When entering the disposal of a PTP the software directs me to not enter the sale price and basis if the sale was reported on a 1099, which it was.  The problem is that the original basis (purchase price) was $500,000 and the adjusted basis provided on the K-1 Sale Schedule shows an adjusted basis of -$1,500,000 as well as a 163(j) adjustment of $1,300,000.  What is the correct way to enter this?  Using the numbers on the 1099 show a much lower gain, but I do feel like this is correct.  Any help would be greatly appreciated!

[BobKamman]

Once the basis was used up, were the losses being carried over every year?   What happens with that amount this year?   

[kindracpa]

All of the losses have been suspended, but can be recognized this year due to the disposal.  

[BobKamman]

Is this just an arithmetic problem?  Cash out minus cash in should equal gains on Schedule D minus losses on Schedule E.  If not, at least you have a clue about where to look for explanation.  

[Accountant-Man]

Whenever I saw a sale of a PTP on both the K-1 and 1099, I entered both but also made an entry to zero out the 1099 entry SINCE IT WAS WRONG AS YOU STATED. The 1099 basis was the original cost.

The K-1 sale entry would correctly report any gain or loss and any recapture.

[kindracpa]

I wish it were that straight forward.  There are Section 751 adjustments as well as 163(j) adjustments.  The basis has been adjusted downward over the life of the investment.  

[sjrcpa]

Somewhere on the 20 pages of PTP K-1 and inductions they tell you how and where to report the sale, and give you most of the numbers (or how to compute them)

Remember that basis in a partnership is not what you originally invested.

[BobKamman]

I have seen 1099s from full-service brokers where the cost basis matches what is shown on the K-1. Your results may differ; that’s why it’s important to match cash out minus cash in, with the income shown on the return. And attach a computation of how you reached that result. You’re talking about real money here, not just numbers on a page.

[kindracpa]

I am using the Schedule of Sales in the K-1.  The only item I am still have an issue with is the 163(j) deduction.  The software does not handle it and so I entered it manually on schedule E.  This is creating an error on "Error Check" because I had to manually override a field.  Any thoughts on how to enter this differently?

[Accountant-Man]

My point exactly. See sjrcpa's response.