Outside cost basis and Capital Gain as a LP

[StephenC]

I'm trying to figure out my outside cost basis and capital gain for a Limited Partner in a Real Estate Partnership.

Last year outside cost basis is $140,922
This Includes $169,685 Liabilities.

This year which is Final K1 has
Current year Increase/Decrease -$13,447
Other Increase/Decrease $42,211
Withdrawals & distributions -$1

What is my Cost basis?
What is my Sale Price?
What is my Capital Gain?

Thanks

[Rick19744]

With the limited details provided, this is what I see:

• Prior year basis $140,922
• Reduce that by the liabilities that are no longer considered basis and you get ($28,763)
• Add current year decrease of $13,447 and you get ($42,210)
• Add in other increase of $42,211 and you get $1 tax basis
• Looks like you received $1 in distributions (selling price)
• So $1 tax basis and $1 selling price arrives at a zero gain.
• Enter all this into TT and the above should be reflected on form 8949 and then Schedule D.

[Mike9241]

what are the other increases/decreases? often the preparer will insert plugs to zero out capital in the final year. this may not add to your outside tax basis. If there is no explanation with the k-1, ask the preparer because we have no way of knowing. This could be taxable income of some sort. 

the current year amount should be the net loss reflected in part III

[StephenC]

Thanks Rick for responding.

The debt relief of -$28,763 should that be added to my distribution because it exceeds my remaining outside basis?

Cost Bases = 0

Sales Price = $28,764 ($1 Distribution + $28,763 Excess Debt Relief)

Capital Gain = $28,764

This is the part of confusion for me.  Please confirm

Thanks again

[Rick19744]

The liabilities provided tax basis in order for the allocation(s) to meet the substantial economic effect test, and as such, provided outside debt basis (tax basis).

You have effectively "taken the distribution" by adjusting your tax basis as noted in my original reply.

Based on the facts provided, the initial response makes sense.