Can I report a capital loss on my return from a limited partnership investment that went into receivership and has been dissolved?

[PatriciaV · Accepted solution]

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. 

[Imalreadysignedon]

"The program will then ask you how you disposed of the investment (disposition not via sale)."

What do I do if the program DOESN'T ask me this, and I DID mark this partnership ended?

[RobertB4444]

If you marked this as the final K-1 and the partnership dissolved then you have done what you need to do and your investment will be liquidated.  If you entered all of the information about your basis and everything else then the program didn't ask because it already has the information.

If it is not showing the partnership as ended then you need to go back through your entries and check to make certain you checked final K-1 and all of the other information should follow from that.

@Imalreadysignedon