not every partnership will have ordinary gain and there's no way you can figure it out on your own. Partnerships are required to report this. If the box for the 4797/ordinary gain is zero or missing from the sales schedule, there is none. also look for BOX 20AB on the k-1 which is another place where any ordinary gain is reported. it will likely say section 751 gain(loss). if it ain't there it's zero.
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so if nothing is reported and you had a complete taxable disposition of all units by year end in the sales section of the k-1 fill it out and use zero for sales price and zero for cost. it's necessary to properly enter all info so that passive losses are allowed upon total and complete disposition of your interest
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Many PTP sales disclosure schedules include an ordinary income component. The ordinary income is Sec. 751, or "hot asset," ordinary income, which is discussed in more detail in Milo, "The Tax Cost of Hot Assets Upon the Disposition of a Partnership Interest," The Tax Adviser (August 2010). Sec. 751 refers to the ordinary gain from the sale of unrealized receivables and substantially appreciated inventory. There seems to be a common misconception that ordinary income is recognized only to the extent of gain, much like a depreciation recapture in an asset sale. This is not correct. Ordinary gain is fully recognized whether there is an overall gain or loss on the sale.
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no inventory and no unrealized receivables no 751.
some PTPs are operating businesses which will have hot assets. others are investment partnerships (sort of like mutual funds or ETFs) with no inventory and no unrealized receivables.
