Thanks Dave!
While waiting for a reply, I had selected "complete disposition". I found the worksheet on p. 3 of the IRS's K-1 instructions to calculate and enter the partnership basis but left blank the sale price and all other fields on that screen. Now that I changed to "disposition was not via a sale" as per your instructions, I went from a refund of >$700 to tax due ($14). Any idea why?
As far as liquidation, I reported the sale of business property on the K-1 in box 1, Ordinary Business Income, since I never capitalized it as inventory, just expensed it in the year of purchase. The property I was unable to sell before dissolving the LLC was treated as a final distribution in box 19 with code C, alongside the final distribution of cash (the proceeds from the successful sale of property) with code A. Could you please explain your concern and how I should address it?
Thanks,
Allison
