Ok. Based on your responses:
- Since Section L is GAAP, you need to determine your tax basis in the investment.
- Since Section L is GAAP, my question #3 is moot.
- To determine your tax basis, you start with your original capital contribution. This beginning amount is adjusted annually by the applicable lines on your K-1. Below I will include a link to the K-1 instructions that has some guidance on maintaining your basis schedule.
- Once you have determined your basis through the final K-1, add the $3,000 syndication costs to your basis based on the note to your K-1.
- Now you are ready to determine your overall gain or loss. If you still have a positive basis after adjusting for the final K-1 and liquidating distribution, then this is a long term capital loss. If your basis is negative, then you have a long term capital gain to the extent of the negative figure. These amounts are reported on Schedule D and the applicable form 8949.
- Make sure you indicate in the K-1 input area that this is the final K-1.
The basis discussion and worksheet is on page 3 of the K-1 instructions.
*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.
