In K1 "This partnership ended last year." Does this mean I sold company stock? or The company itself changes? The meaning is very confusing to me.

[PAGB]

@PatriciaV   Many thank for your responses. I have a similar predicament.

Still a little confused since I'm getting conflicting info so any help is much appreciated from anyone.

Our K-1 has the box "final K-1 checked" and it is a PTP.

Transactions  reported on 1099-B so we don't want to report the sales on the K-1 in order

to avoid duplication.

We received the K-1 because we bought stocks (ETF's). The stocks were all bought and all sold last year (2021).

PatriciaV if I understood your response  correctly the sell of all the stocks would be considered "sold our interest in the Partnership" and so we would choose "Disposed of a portion of my interest" and NOT  "Complete disposition", correct?

[JamesG1]

Your PTP reports Final K-1 but an IRS Form 1099-B also reports the sale of the investment.  Make sure that the sale is not reported twice. 

That could occur once through the K-1 screens and a second time through the 1099-B entries.

Be aware that if:

• At the screen Describe the Partnership, you report Disposed of a portion of my interest.... and
• At the screen Tell Us About Your Sale you reported Sold Partnership Interest,

the sale is being reported.  You would not report the sale on IRS Form 1099-B Proceeds.

Within the K-1 entries, at the screen Describe the Partnership, you may elect This partnership ended in 2021 and No entry at the screen Describe Partnership Disposal.

In this case, you would report the sale on IRS Form 1099-B Proceeds.

Review the sale of the investment reported on IRS Form 8949 Sales and Other Dispositions of Capital Assets and IRS Form 1040 Schedule D Capital Gains and Losses.

You are able to view the entries at Tax Tools / Print Center / Print, save or preview this year's return.

[PAGB]

@JamesG1 

Thank you for answering.

When completing the "Stocks, Mutual Funds, Bonds, Other" with TT  we choose  "a summary for each sales category" and will attach a pdf file for the 8949 since it is very big. So these sales will be included in the summary section and will appear on the 8949.

If I understand you correctly that means I should follow the second instructions you mentioned meaning for Describe the Partnership I would choose "This partnership ended in 2021" and for Describe Partnership Disposal I would choose "No entry".

Is this correct?

[PatriciaV]

Yes, follow the instructions from our awesome Expert @JamesG1. Report this as the disposition of a portion of your interest and make no entry for the partnership disposal. This will prevent double-reporting of the sale.

[PAGB]

@PatriciaV 

Thank you very much.

Since we have sold everything and Year End Shares are 0 (these were all stocks) I believe I have to

choose " Partnership ended in 2021" and not " Disposed of a portion of my interest" ?

[DaveF1006]

Yes, you will report that the partnership ended in 2021, which is the correct way to report this. Choosing the second option would indicate that the partnership was still in business and you merely choose to divest yourself from your partnership interest.

@PAGB

[PAGB]

@DaveF1006 

Thank you for answering. I'm a little confused and trying to understand.

My husband bought a series of  ETF (exchange traded fund) on the stock market with an

entity called Proshares.

We have Final K-1 checked on the K-1

"Choosing the second option would indicate that the partnership was still in business and you merely choose to divest yourself from your partnership interest."

Proshares itself still exists and is not out of business. On our K-1 Part 1(information about the partnership) there's an employee identification number as well as their name and address.

Are you implying that since we sold our "all our shares" the partnership no longer exists?

If it isn't too much trouble could you explain what kind of case would it would be where we have divested all our interests but the partnership is still intact (exists)?

[DaveF1006]

My apologies, I misread the question initially. You would choose the option where you disposed a portion of your interest, in the case, all of it.  I didn't mean to imply that since you sold your shares, the partnership no longer exists.

@PAGB

[PAGB]

@DaveF1006 

Thank you

I ran into another problem in regards to questions about Risk,

I called TT and at this screen I was told to not choose any of the options

Describe the Partnership:
I have passive activity losses carried over from last year. Learn More
All of my investment in this activity is at risk. Learn More
I have at-risk losses carrying over from 2020.
I personally paid health insurance and/or long-term care insurance premiums for myself and my family.
I have passive activity credits to claim from this publicly traded partnership. (This is not common)

This brought me to this screen:

"Working with At-Risk Limitations
You've told us that some of your investment in this partnership is not at risk. Your at-risk amount is generally the money you'd lose (or the debt
you'd be liable for) if this partnership stopped operations tomorrow.
If the partnership loses money, your losses are limited by the amount you have at risk. As a result, you may not be able to fully deduct your losses.
Next, we'll calculate just how much you can deduct."

In the next screens I was told to put zero's and at the end of this Sch K-1 this is what TT told me.

"The amount of loss you may be able to deduct is limited by the amount you have at risk. Based on the amount you have at risk in this
investment, your deductible loss may be as much as zero and the nondeductible amount required to be carried forward to next year is  "XXX"

XXX=the amount in box 11 (code c) which is a negative number"

But this doesn't seem right, does it?

[DaveF1006]

To clarify, what is the reason you were given for reporting your investment was at risk? I would think your investment was a risk investment because if those stocks underperformed, then you lost your investment. I would check this box if this is the case.

@PAGB 

[PAGB]

In this screen:

Describe the Partnership:
I have passive activity losses carried over from last year. Learn More
All of my investment in this activity is at risk. Learn More
I have at-risk losses carrying over from 2020.
I personally paid health insurance and/or long-term care insurance premiums for myself and my family.
I have passive activity credits to claim from this publicly traded partnership. (This is not common)

I was told to Not Choose any of the options, implying that I am claiming my investment isn't at risk.

But if I understand you correctly you are saying that during 2021 since I would loose money if the stocks under performed then that mean my investment was at risk and I should choose " All of my investment is at risk"

@DaveF1006 

[GeorgeM777]

Yes, and to follow-up on the comments from @DaveF1006, you would indicate that all of your investment is at risk.  Choosing another option as you have seen will impose a limitation on what you can claim in terms of loss.  Moreover, it appears you may be a limited partner in the ETF or Fund which means the extent of any loss will be limited to the amount of your investment. 

@PAGB

[PAGB]

Thank You for answering.

Yes this is a limited partnership. And we are using the info in Column 5  (Cumulative Adjustment to Basis) of our Sch K-1 to adjust the basis of the sales of the stocks for reporting on 8949.

I went ahead and chose "All of my investment is at risk". I only had a (negative) value in box 11 (code C) and all other boxes are empty.

The 'Your Income' page now shows :

Sch K-1 shows 0.00$

Contracts and Straddles shows the amount (a loss) shown in Box 11 (code C)

@GeorgeM777 

[GeorgeM777]

Because you have a loss in Box 11 with Code C, you may see Form 6781 as part of your return.  The partnership will report any net gain or loss from section 1256 contracts and this amount will be reported on Form 6781, Gains and Losses From Section 1256 Contracts and Straddles.

PAGB

[gerryj1216]

I have the same problem and not sure how to do this. Can you give more details as to how you entered this using premiere? Appreciate for any help.