Yes, you may report this sale on your current tax return. Enter this under Wages & Income >> Investment Income.
While you might have reported the investment as disposed of in the year of the final K-1, since you actually sold the investment in the following year, you should report the sale in the year it occurred.
- Choose Federal Taxes >> Wages & Income, then I’ll Choose What I Work On.
- Investment Income >> Stocks, Mutual Funds >> Start/Update.
- Type of Investment: Everything Else
- Enter a description, Net Proceeds of sale, and date of sale
- Acquired: whatever method fits
- Cost Basis: your net investment as of the date of the sale
Note: The capital account reconciliation on the K-1 is not necessarily your book value for the investment. You should have separate records of investment, distributions, allocated income/loss, etc. to determine your basis on the date of the sale.
- Date of Acquisition: the first date you contributed to the partnership
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