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jbowers
New Member

K1 partnership disposition not via a sale

i was involved in an investment property that was sold in 2015.  I received my final K1 for 2016 and i don't know how to answer the question of how i "disposed of the partnership". I didn't actively "do" anything so i'm thinking i just choice "disposition was not via sale" and leave it at that, but not sure if that's correct.  Asked for purchase and sale dates.  i was just going to leave those blank b/c if i wasn't involved in a "sale" of the partnership, i don't know how to respond.  Does this sound correct?
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Accepted Solutions

K1 partnership disposition not via a sale

In essence you have sold it.  So answer "yes" to the sold via sale question.  We have had discussions on the options here and I believe it is cleaner if you answer it this way.

As a partner in the partnership you should have been maintaining a basis schedule.  This begins with your original capital contribution and is updated annually for the applicable lines on your K-1.

You need to either create this basis schedule or update it for your final K-1 EXCLUDING any liquidating distribution.

Once you have your basis schedule up to date, you now have what TT is asking for; You should know when you acquired the partnership interest, just use 12/31/2016 if no other sale date was provided, your cost is equal to your updated basis figure and the sales price is your liquidating distribution.

This final gain or loss will then be reflected on Schedule D and the applicable form 8949.

*A reminder that posts in a forum such as this do not constitute tax advice.
Also keep in mind the date of replies, as tax law changes.

View solution in original post

2 Replies

K1 partnership disposition not via a sale

In essence you have sold it.  So answer "yes" to the sold via sale question.  We have had discussions on the options here and I believe it is cleaner if you answer it this way.

As a partner in the partnership you should have been maintaining a basis schedule.  This begins with your original capital contribution and is updated annually for the applicable lines on your K-1.

You need to either create this basis schedule or update it for your final K-1 EXCLUDING any liquidating distribution.

Once you have your basis schedule up to date, you now have what TT is asking for; You should know when you acquired the partnership interest, just use 12/31/2016 if no other sale date was provided, your cost is equal to your updated basis figure and the sales price is your liquidating distribution.

This final gain or loss will then be reflected on Schedule D and the applicable form 8949.

*A reminder that posts in a forum such as this do not constitute tax advice.
Also keep in mind the date of replies, as tax law changes.
jbowers
New Member

K1 partnership disposition not via a sale

my choices were: no entry, complete disposition, disposition was not via sale, or sold and am receiving payments.  I did not take any specific action to dispose of my interest in this partnership, it just ended after the investment property was sold and the odds and ends cleaned up.
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