hello nextchap,
Can you add any insight into my K1 situation for tax year 2022. I received a K1 from Cypress Environmental for year for tax year 2022. The cover sheet stated the partnership did NOT qualify as a partnership in 2022. The k1 therefore contains all zeros, and no sales schedule, Nothing but zeros..
At 1/1/2022 I had 245K units, which were subsequently sold at a loss in 2022, right before they filed for ch11. I have a large "passive loss" from previous years carry-forward I intend to use. The "loss" gets released into my tax return on complete disposition of units on Sch E, but I cannot figure out how to calculate "ordinary gain" from sale on units, which gets reported on Form 4797. This is where I would normally use the K1 figures on the sales schedule...Ord gain.
Capital account at year-end was positive 200K and passive loss carryover at year end was (160K). Any insights as to how I can figure "ordinary gain" for Form 4797 from the sale of approx 245k units??
THANKS
the cover letter for the K1 read this ........
"Cypress qualified to be a publicly traded limited partnership for federal income tax purposes through December 31, 2021. For the year ended December 31,2022, Cypress did not generate sufficient qualifying income, as defined by the Internal Revenue Code, to qualify as a partnership, and accordingly CELP is treated as a corporation for federal income tax purposes effective January 1, 2022. As a result, the enclosed schedules do not include any information regarding the income and expenses of Cypress subsequent to December 31, 2021, nor any information on any purchases or sales of Cypress common units that you may have made subsequent to December 31, 2021."
