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bonsaique
New Member

Where do I report the sale of my partnership interest in an S corporation?

 
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Accepted Solutions
HelenaC
New Member

Where do I report the sale of my partnership interest in an S corporation?

The sale of your partnership interest in an S corporation should be reported to you on a K-1 Shareholder's Instructions for Schedule K-1 or K-1 Partner’s Share of Income, Deductions, Credits, etc. The K-1 will be issued to you by the by the entity. 

If you haven't already filed your return and want to enter your K-1:

  1. Open (continue) your return in TurboTax, if it's not already open.
  2. In your TurboTax program, search for K-1 or K1 (lower-case works too) and then click the "Jump to" link in the search results.
  3. This will take you to the Schedules K-1 or Q screen. Answer Yes and follow the prompts.
    • Note: You may be prompted to upgrade to Premier, depending on which version of TurboTax you're in.

Unlike W-2 and 1099 forms which typically are received in February, K-1s are often not sent until March or April, sometimes even later. This is because the K-1 issuer needs to complete their tax return first.

If you already mailed your return, or you e-filed and it was already accepted, you'll need to amend your return.

The sale of your interest will be reported on Schedule D, Capital Gains and Losses. When sales and exchanges of capital assets are entered in TurboTax, they also appear on Form 8949 and are moved to Schedule D, Capital Gains & Losses. Part I of the form shows short-term sales (assets held less than one year), Part II shows your long-term sales (assets held more than one year).

Partnership Interests - A sale or other disposition of an interest in a partnership may result in ordinary income, collectibles gain (28% rate gain), or unrecaptured section 1250 gain. For details on 28% rate gain, see the instructions for line 18. For details on unrecaptured section 1250 gain, see the instructions for line 19.

Click 2015 Instructions for Scheudule D Capital Gains and Losses

Additional information:

What is a Schedule K-1 Tax Form?

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4 Replies
HelenaC
New Member

Where do I report the sale of my partnership interest in an S corporation?

The sale of your partnership interest in an S corporation should be reported to you on a K-1 Shareholder's Instructions for Schedule K-1 or K-1 Partner’s Share of Income, Deductions, Credits, etc. The K-1 will be issued to you by the by the entity. 

If you haven't already filed your return and want to enter your K-1:

  1. Open (continue) your return in TurboTax, if it's not already open.
  2. In your TurboTax program, search for K-1 or K1 (lower-case works too) and then click the "Jump to" link in the search results.
  3. This will take you to the Schedules K-1 or Q screen. Answer Yes and follow the prompts.
    • Note: You may be prompted to upgrade to Premier, depending on which version of TurboTax you're in.

Unlike W-2 and 1099 forms which typically are received in February, K-1s are often not sent until March or April, sometimes even later. This is because the K-1 issuer needs to complete their tax return first.

If you already mailed your return, or you e-filed and it was already accepted, you'll need to amend your return.

The sale of your interest will be reported on Schedule D, Capital Gains and Losses. When sales and exchanges of capital assets are entered in TurboTax, they also appear on Form 8949 and are moved to Schedule D, Capital Gains & Losses. Part I of the form shows short-term sales (assets held less than one year), Part II shows your long-term sales (assets held more than one year).

Partnership Interests - A sale or other disposition of an interest in a partnership may result in ordinary income, collectibles gain (28% rate gain), or unrecaptured section 1250 gain. For details on 28% rate gain, see the instructions for line 18. For details on unrecaptured section 1250 gain, see the instructions for line 19.

Click 2015 Instructions for Scheudule D Capital Gains and Losses

Additional information:

What is a Schedule K-1 Tax Form?

bonsaique
New Member

Where do I report the sale of my partnership interest in an S corporation?

I do have the Schedule K-1, however someone told me that I would have to file the sale of my partnership interest under "sale of business assets", which then asks for my cost basis, sale price and "depreciation".  I have owned my interest in the company almost twenty years and am not quite sure where to get the old depreciation figures.  Am I to assume by your "TurboTaxHelenaC" response that I can forgo this section and just put the numbers from my K-1 on the return?  FYI, the only two spaces filled in on the K-1 are Line 1 "Ordinary Business Income/Loss" and Line 16 "Items Affecting Shareholder Basis" with a "D" in the explanation.  Thank you for your help!
HelenaC
New Member

Where do I report the sale of my partnership interest in an S corporation?

No, line 16 indicates the sale has to be reported on Schedule D, Capital Gains and Losses. I have added information to my answer, Instructions for Schedule D. The only way to get the depreciation amounts is to look back at your old income tax returns or if you have the beginning depreciable basis, you could re-create it in TurboTax. You can also ask the accountant that issued the K-1 if they have any record of your depreciation amounts taken.
TaxGuyBill
Level 9

Where do I report the sale of my partnership interest in an S corporation?

Go into the Personal tax, and down to the section where you sell "Stocks, Bonds, Mutual Funds", etc.

Enter the sale of your corporate stock (it's corporate stock, not a partnership interest) there.
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