Can I enter "zero" as an adjusted cost basis for sale of interest in a partnership when the cumulative adjustment to basis is more negative than the original cost ?
Sign Up

Why sign in to the Community?

  • Submit a question
  • Check your notifications
or and start working on your taxes
Announcements
TurboTax has you covered during Covid. Get the latest second stimulus info here.
cancel
Showing results for 
Search instead for 
Did you mean: 
New Member

Can I enter "zero" as an adjusted cost basis for sale of interest in a partnership when the cumulative adjustment to basis is more negative than the original cost ?

 
1 Reply
Level 10

Can I enter "zero" as an adjusted cost basis for sale of interest in a partnership when the cumulative adjustment to basis is more negative than the original cost ?

That would be what I recommend.  However the facts are not clear on how to handle the other aspect of this disposition:

  • Technically your basis cannot go negative.
  • Based on bullet number 1, do you have suspended losses?
  • If you do have suspended losses, you can only take the losses to the extent of your basis; effectively arriving at a zero basis.  Anything remaining will be lost; no economic loss.
  • If you don't have suspended losses you will need to pick up the "negative" basis amount as capital gain on Schedule D and the applicable form 8949.
*A reminder that posts in a forum such as this do not constitute tax advice.*
Dynamic Ads
v
Privacy Settings