K-1 Form 1065 Box 19 C-Other Property

[dbgrana]

I have two form 1065's and one for 2024 and one for 2025. They are both 2025 form 1065. The question I have is on the LLC 2024 has ended in 2025 with no losses and is transferred to the next year in the number of points and not associated with any dollar amount. I have filled it out as follows when closing out the entity I mark it as "This partnership ended in 2025" and on the next section with "No Entry" and I am confused on whether I enter the "Adjusted Basis" or "Fair Market Value". Everything I read states to enter the Adjusted Basis. Is this correct?

The second K-1 is a new partnership, so I just entered everything in the form as it asks with no issues. I have never closed out an entity before, so I think I need to amend my previous tax return for 2023 since that is the first year of investment in the partnership. I think I also need to close out that year in 2024. I am just trying to confirm on the above. Thank you.

[Mike9241]

There are issues.

1) The 2024 K-1 should go on your 2024 1040 but that 2025 date creates issues with a potential mismatch. It should have been issued on a 2024 K-1. Of course, if part III is all zeroes, there's nothing to enter

3) Turbotax does not calculate basis. However, it would be the cash you put in + income - losses - deductions - credits - distributions (other than liquidating distributions) for all the years it existed. That info might be in section L of the K-1, except that liquidating distributions would be included on the line for withdrawals and distributions. 

then you enter in the disposition section of the 2025 K-1, that it was sold 

If you received the property in liquidation of your interest (you apparently did), your basis in the distributed property (the sales price) is equal to the adjusted basis of your partnership interest reduced by any cash distributed in the same transaction. Using the information provided by the partnership and your own records, complete a Form 7217 for each date on which you receive a liquidating or non-liquidating distribution of property from the partnership. Attach the Form(s) 7217 to your income tax return. Thus, you will have no capital gain or loss upon the partnership termination. If and when you sell the distributed property, you will have a capital gain or loss measured by the difference between its selling price and its basis. Form 7217 is not included with TurboTax; you'll have to prepare it manually and then mail in your return. 

Forn 7217 

[dbgrana]

Hello @Mike9241 For number 1 That is NOT the way the business closes out the end of the year. There fiscal year goes from May 2024 to May 2025 so that is why I got a 2025 tax form 2025 for fiscal year 2024 for the previous year as I am closing out that entity since they open up a new one each year. 

For number 3 I think you are misunderstanding what I am asking as there is NOTHING else filled out on the K-1 accept Box 19 - C (Other Property) - See statement. The statement reads for example Adjusted basis is $25,134.00 and the Fair Market Value is $1,115 and NO I have not received any tangible money physically, because the investment is carried over to the next year, but all I am doing is closing out the last year (2024) partnership as they are opening a new one up (2025) each fiscal year. Box L for example contains the same number as the adjusted basis states. For fiscal year 2025 will close out in 2026 as an example). In that case there is NOTHING received.  What I am asking is what do I enter for "C (Other Property) as there is only one section for the dollar amount in Turbotax. The only choices I have are the Adjusted basis or the Fair Market Value. Which one would I enter? Everything I have read I should enter is the adjusted basis as Turbotax does NOT have a section for both the Adjusted basis and the Fair Market Value. The recommendation from Turbotax is enter the adjusted basis. What do you recommend based on my statement above? Thank you.

[RobertB4444]

Follow the recommendation from TurboTax and enter it as an adjusted basis.  This is essentially just going to be carried forward til the investment is sold off.