@GoodShip If this was an exchange from a partnership status to a regular corporate status, and your K-1 was marked as "final", then you'd handle the exchange as though it was in 2 steps:
- A sale of Cypress: the suspended losses would be released, it sounds like Ord Gain is 0, but you have to adjust your basis using the sales schedule, or your own calculations.
- A purchase of this new stock: the purchase price of the stock should match the sales proceeds you used in step 1.
But if this was an exchange between one partnership to another, that's not a complete disposition: your suspended losses stay suspended, just as part of the new partnership. They'd then be released when you made that sale.
Either way, you get to release the suspended losses and use them to offset your other income. The only difference between the two scenarios is whether there are two 1099-Bs (one for 1/1/22, and the 2nd for your final sale) or just one. And either way, you have to adjust basis: from what you originally paid, until the sale, you received $79,000 in tax benefits. So your basis has dropped by at least that much (and probably more assuming you received any cash distributions).
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**Note also, I'm not a Tax Preparer/CPA. Just a volunteer, seasoned, TurboTax user.
Use any advice accordingly!
