You would need to report the loss on form 8949, which then flows to Sch D and then Schedule K lines 8 or 9 as applicable. This then will also flow through to Sch M-2 line 3 which means Sch M-2 line 9 should then be zero.
This will also flow to the respective K-1 line and this is where each member will be able to recognize the loss on their respective 1040.
Sale date is on the option expiration date and purchase date is when you acquired the option.
*A reminder that posts in a forum such as this do not constitute tax advice.
Also keep in mind the date of replies, as tax law changes.
