PatriciaV
Expert Alumni

Business & farm

If you transferred your capital out of one investment into another, you will report the first investment as "sold or disposed of" for zero dollars.

From the IRS' perspective, you received a final distribution from the first investment and used that "money" to buy your second investment. This may trigger a tax gain or loss, depending on your basis in the first investment. Be sure you complete the Capital Account Information (see screenshot below - click to enlarge) during the K-1 interview for both investments.

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