@jmhart49 I'm not completely clear on where you're making the entries. So first, there will be 3 spots where this sale will show up:
- When you complete the K-1 interview correctly, the Ordinary Income of 3734 will appear on form 4797. It will be positive. This is Income. You pay taxes on it.
- When you complete the 1099-B correctly, you'll enter 9308 for Proceeds and 11,540 for Basis. The 11,540 is your purchase 13501 less your adjustments 5695, but adding back the 3734 being reported as income on 4797 = 11,540. This gives a capital loss of 2,232.
- Finally, you've had suspended losses on your return for each year you've had the investment. When you do a "Complete Disposition" those losses are released to Sched E. Those losses, plus the -2232 Capital Loss, plus the 3734 Ord Income is your total tax impact.
Note that you're focusing on the distributions of $2,716, but your partnership gave you that cash PLUS all the other tax entries on the K-1. All those other entries are why your Cumulative Adjustments were $5695 and not just the $2716. That's why the Suspended Losses appearing on Sched E are important.
As a final reconciliation, if you think about it purely from a cash in vs cash out standpoint, you spent $13,501 and you received $9,308+$2,716 = $12,024. So a loss of $1,477.
- On your tax return, you'll see $3,734 of Income (Form 4797), a loss of $2,232 (1099-B), and I'm betting roughly a loss of $2,979 on Sched E. The total of those 3 is the $1,477 cash loss you saw in your wallet.
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**Note also, I'm not a Tax Preparer/CPA. Just a volunteer, seasoned, TurboTax user.
Use any advice accordingly!
