Final Partnership K-1 - how to enter on Turbo Tax?

[daisypap]

We had a real estate partnership from 2005-2021.  Only had one piece of real estate that was finally sold in August 2021 and partnership ended.  Initial capital contribution was $17,500.  Over the years, only had very minimal losses (basically CPA bills).  So capital account reduced to $12,091 on final k-1.  This is also my outside basis.  Property sold at a loss, so my final distribution from partnership is $13,346.  So Part L shows beginning capital account of $12,091, Current year loss of $6923 and a distribution of $13,346.  When I enter on TT, I enter final K-1 and it asks me how it was disposed.  If I say complete disposition, it asks if it was a sale of a partnership interest or a complete liquidation.  Which would it be?  then it asks for purchase date and sale date, sale price, partnership basis, ordinary gain and 1250 gain.   This is where I get lost.  Any suggestions on how to enter these numbers?  

[ZoltanB45 · Accepted solution]

It would be a complete liquidation, because you didn't just leave the Partnership, the Partnership dissolved. I would put the organization date as purchase date, the date the partnership dissolved as the sale date. Enter zeros where they are asking for numbers. The activity in the sale of the property should have be illustrated in the 1065 return. No need to re-enter anything. 

[Rick19744 · Accepted solution]

Keep in mind, if your partnership dissolution date is the same as your sale date, you more than likely have a late partnership tax return.

The partnership return is due the 15th day of the 3rd month.

So if you use sometime in August 2021 as your final day, the return was due in November 2021.  If you did not request an extension, then your return is late.

Did you not have some final bills to wait for and pay?

Also remember you may have to contact your Secretary of State to close out the partnership.  This will vary by state, so you may just want to follow-up on this.

[daisypap]

Thanks so much for taking time to answer.  This was very helpful.  

[Newes]

I had to file an extension on my 2021 taxes. I have a similar situation as daisypap.  The underlying asset in a partnership was sold so the partnership was dissolved. Just to clarify the response to daisypap where TT asks for purchase date and sale date, sale price, partnership basis, ordinary gain and 1250 gain you complete the date of purchase and sale and put in $0 for the sale price, basis and gains? If that is correct is that because the IRS already has that partnership information via a filing from the general partner?