@Sait When the partnership generates losses (e.g., a negative number in box 1) you get to deduct those losses from your other income. But you can't take them immediately. You only get to take them when that same partnership generates some sort of positive income OR when you sell the partnership completely. Until that time, they're suspended (and you can see them in TT by looking at the K-1 worksheet).
So on a complete disposition, there are always three moving pieces: the capital gain/loss, the Ordinary gain, AND the losses that the partnership generated which have been suspended waiting for the sale. Those losses show up on Sched E.
It would be pretty unusual for those losses to exactly match the Ordinary Gain from the sales schedule, but is mathematically possible. Typically, they'll be in the same ballpark.
As a check, and to bring tax magic back to the real world, if you figure you're real world profit (cash when you sold, PLUS cash you received as quarterly dividends, MINUS what you paid) it should almost exactly equal what's being taxed (cap gain PLUS 4797 PLUS Sched E).
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**Note also, I'm not a Tax Preparer/CPA. Just a volunteer, seasoned, TurboTax user.
Use any advice accordingly!
