I was in a limited partnership that filed for bankruptcy. All shares were cancelled with no consideration. Is this a complete dispostion or disposition not via a sale?

[bankrupt-limited-partnership]

The limited partnership filed for Chapter 11 Bankruptcy in 2017. Holders of equity interests are not entitled to any recovery. 

Also regarding my investment in this limited partnership, is all of my investment in this activity at risk? That option seemed to be the most appropriate as the other listed options were not applicable. 

[PatriciaV]

Yes, if you received Schedule K-1 marked "Final," you may report that the partnership dissolved. Then report a "sale" for zero dollars to write off your remaining basis plus any suspended losses or passive losses carried forward. 

Be sure you edit the partnership information under the Schedule K-1 topic and mark that the partnership ended. The program will then ask you how you disposed of the investment (disposition not via sale).

Also check the boxes for passive activity losses carried over from last year and/or at-risk losses from last year. This will prompt the program to ask for the amount of losses in each category and calculate the amount that can be used on your current return. 

Most partnership investments that used your own money are At-Risk. Here are the qualifications that would make your investment Not At Risk:

• Non-recourse loans used to finance the business
• Cash, property or borrowed amounts used in the business that are protected against loss by a guarantee, stop-loss agreement, or other similar arrangement (excluding casualty insurance and insurance against tort liability).
• Amounts borrowed for use in the business from a person who has an interest in the business, other than as a creditor.

[xlcajun]

Similar situation, however never received "Final K1".  The General Partner just stopped sending K1's and the property was foreclosed on by the lenders.  How would I report this?

[DanielV01]

@xlcajun  You actually posted on a very old thread.  However, it is the responsibility of the partnership to report that their activity is dissolved and report it as such on the Schedule K-1.  You yourself only need to enter in the K-1 information as you have received it.  It is best not to enter in information that does not match what the IRS does not show.   It is highly unlikely that the IRS will ask for anything more from you (since it is the partnership's responsibility to send you a "Final" K-1, the IRS will likely go back to the partnership to get this information, if they even decide to do that).  If later the partnership sends you an amended K-1, with the only change being that the "Final" box is checked, you still will not need to do anything more unless the IRS specifically contacts you.