Disposed of worthless partnership k-1 and also received 1099-B - how do I show negative basis?

[kris7404]

My client brought me a final Partnership K-1 which shows a beginning capital account of ($53,470), Current year net income (loss) of (31,377) and Other increase (a negative withdrawal of capital) of 84,847 which totals an Ending Capital Account of 0.  The sales schedule a few pages back shows the following columns:

1. Units Sold = 1077.5

2. Sale Date = 06/24/21

3. Sales Proceeds = I have sales proceeds from the broker's 1099-B of $5,890.00

4. Purchase Price/Initial Basis Amount = $8,979   This is different than what the broker shows.

5. Cumulative Adjustment to Basis - (93,826)

6. Cost Basis = (84,847)  This is supposed to show on Form 8949 Column E

7. Total Gain or Loss is supposed to be #6 minus #3

8. Gain subject to Recapture as Ordinary Income = $82,312   This is supposed to show on form 8949 Column G.

I have entered the 1099-B transaction as shown on the 1099-B but now I need to adjust the numbers to reflect the above information.  I have tried every way except the right way to do this in ProSeries!  How can I get the negative numbers to appear where they should be??

[Just-Lisa-Now-]

If you mark the K-1 as final, a second page opens that you input the sales and basis info. Maybe you can skip the 1099B and make all the entries there.

[kris7404]

I read some other threads from years ago that detailed how to change the basis for sales that had positive basis, but this particular k-1 has negative basis listed and ProSeries won't take negatives in those fields.  That's where I'm getting hung up!

[sjrcpa]

You can't have negative basis, that's why.

Basis in a partnership is not purchase price. It starts with that, then you need to add all K-1 income through the years and subtract all K-1 losses, deductions and contributions.

Your client has income upon the disposition. Looks like 82,312 ordinary and 5,624 capital gain.

[kris7404]

I understand that there can't be a negative basis, but how can I get these numbers to show up in the correct places?

6. Cost Basis = (84,847)  This is supposed to show on Form 8949 Column E

8. Gain subject to Recapture as Ordinary Income = $82,312   This is supposed to show on form 8949 Column G.

I am so frustrated that I'm ready to scream!!  🙂