In general. there is no gain or loss.
Having said that, when you are entering the information into TT, the software will ask if you have disposed of the investment (K-1). You will then need to say "yes".
As part of the interview question process, you will be asked for the cost basis and selling price (yes you will need to indicate you sold it). Here you will enter the liquidating distribution amount of $1,200 (selling price) and the cost basis of $1,200 which generates no gain or loss.
So I modified my response above as you will need to complete form 8949 and Sch D.
*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.
