Final K-1

[sw16]

A final k-1 was distributed for a family trust.  The trust is reorganizing, it is not dissolving.  I do not know how to address this on the 1065.  The assets are still in the trust, nothing was sold.  It is just reorganizing to address deaths and new ownership from those who inherited ownership.  I have to select the partnership has ended, but I do not know how to proceed from this point.  

[Hi Palms]

The partnership ended or the trust ended? If you got a final K-1 from the trust then the trust ended, but what about the 1065 (the partnership)? It's not clear; is that also dissolving? You said the partnership has ended. Is that the case. You need to provide more details on what is happening. 

If the assets are being transferred to a new entity then they have the same basis as the entity transferring them had.

[sw16]

Thank you for your reply.  I misspoke about the trust.  It is a family limited partnership.  They technically ended the partnership so they could make a fresh start with the new family members who have inherited ownership.  None of the assets were sold/dissolved etc., they are all going to be in the new partnership it will be transparent to us.  How do we handle this on turbo tax?  Do we say the partnership has ended?  It seems like we have to say yes because our K-1 is checked as a final k-1.  But then we get into questions about was it sold.  Maybe we should answer yes, then say disposition was not via a sale?  Our K-1 does not give any information about this.  

[Hi Palms]

I can't review the partnership agreement of course but why is the partnership ending? It seems like the partnership would continue to exist but with one or more additional members. One of the reasons the partnership could be dissolved would be if there were fewer than 2 partners but that doesn't seem to be the case.

[PatriciaV]

If you received a final K-1, regardless of the reason, you should enter it in TurboTax and mark that it is a final K-1. The best option is to report that the investment was disposed of in a transaction other than a sale. This will avoid answering questions about sale proceeds.