"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". Yes this is usually the case. But in this case, once they did NOT qualify as a partnership for 2022, they relinquished any and all requirements beginning 1/1/2022. K1 is nothing but zeros. So I still have a 'passive loss" to release from carryover, and this can only be done as complete sale of units on 1/1/2022, which is effectively the conversion date to C-corp. This released all passive loss in TT, and then I adjusted basis in Form 8979 based on year end capital account on 12/31/2021. So far so good.
The only thing left is figuring out "ordinary gain" portion on that conversion to stock on 1/1/2022. There has to be some based on my past experience with PTPs.
thanks
