I have been receiving K-1 every year but the profit is nowhere near the investment. I am loosing in excess of 10000.00
As a partner in a partnership, you should be tracking your basis in this investment. This begins with your capital contribution and is adjusted each year by the applicable lines on the K-1.
Once you receive your final K-1, you will adjust your basis. Only when you have done this will you be able to determine your final gain or loss.
If your liquidating distribution exceeds your basis, causing a "negative" basis, you will have a gain to the extent of this negative amount (essentially putting you to zero). If you still have basis after subtracting your liquidating distribution, then you will have a capital loss to the extent of your remaining basis.
See the attached IRS commentary on adjusting your basis:
As a partner in a partnership, you should be tracking your basis in this investment. This begins with your capital contribution and is adjusted each year by the applicable lines on the K-1.
Once you receive your final K-1, you will adjust your basis. Only when you have done this will you be able to determine your final gain or loss.
If your liquidating distribution exceeds your basis, causing a "negative" basis, you will have a gain to the extent of this negative amount (essentially putting you to zero). If you still have basis after subtracting your liquidating distribution, then you will have a capital loss to the extent of your remaining basis.
See the attached IRS commentary on adjusting your basis:
Thank you very much exactly what I needed to know. Appreciate it very much!!
I understand this answer, and thank you, but where in TurboTax would we enter the final gain/loss? I don't want to alter my K-1 in TurboTax to differ from the one I received, but that seems to be the only way to include it in my TurboTax return.
Never mind. I found the answer in another post. Form 8949.