I invested in a start up that went bust in 2024. The final K1 has the Account Analysis illustrating a decrease of $15,000 in the Capital Account (Ordinary Business loss and Net section 1231 loss). Part III include values for Ordinary Business Loss, Net Section 1231 loss, Net Long Term Capital Gain, etc.
I considered this a Complete Dissolution and Abandoned Partnership Interest.
The confusing thing is the decrease in the Capital Account plus the Net Section 1231 appears on Form 4797 (sale of business property) while the Ordinary Business Income appears on Schedule E (all losses).
Seems like double dipping; that the deduction should be the loss in Capital only (not Income or 1231 losses also).
The illustration is simplified here.
Any comments/suggestions
