liquidating K1 for general partner

[bobi]

Client has final K1 for partnership which owned real estate.   K1 has the Section 1231 gain and the unrecaptured section 1250 gain which I reported on the K1 worksheet.   It looks like the ending capital account is a negative number.  This would mean that there was a final distribution in excess of partner basis.    Do I need to do something with that figure?   I have not reported this on Sch D since this is not a public partnership and was not reported on a 1099.  This really is not my field so looking for help.

[HillBilly]

There could be reportable gain here and/or basis could be off.

In Pro Series, mark this K-1 to be final return, in that section go to "QuickZoom" for disposition of interest.  This takes you to Part II of Partnership Additional Info - Disposition of Interest.  Work thru that schedule and see what occurs.

Results show up on schedule D,Part II Line 10  &  Form 8949 Part II

Have a great day in K-1 land !

[bobi]

Thank you.   I was actually having trouble filling out that section.   I see the amount from the K1 that was distributed but the ending balance on this final K1 was a negative number.   I guess I need to look at the K1 to see what the basis was before the distribution.

[HillBilly]

In general if there is a gain or loss for the partner on final distribution of a partnership it is based on Partners actual basis (initial /additional investment & distributions) and money/assets received upon distribution.  The basis showing on K-1 is often different than the partners actual tax basis.  One example of different basis is if the partner inheirted the Partnership Interest.  Partnership Interest can also be sold for more or less than than the K-1 basis and partner reports what they received from sale.

Have a great day!