Yes, if you received Schedule K-1 marked "Final," you may report that the partnership dissolved. Then report a "sale" for zero dollars to write off your remaining basis plus any suspended losses or passive losses carried forward.
Be sure you edit the partnership information under the Schedule K-1 topic and mark that the partnership ended. The program will then ask you how you disposed of the investment (disposition not via sale).
Also check the boxes for passive activity losses carried over from last year and/or at-risk losses from last year. This will prompt the program to ask for the amount of losses in each category and calculate the amount that can be used on your current return.
Most partnership investments that used your own money are At-Risk. Here are the qualifications that would make your investment Not At Risk:
- Non-recourse
loans used to finance the business
- Cash, property or
borrowed amounts used in the business that are protected against loss by a
guarantee, stop-loss agreement, or other similar arrangement (excluding
casualty insurance and insurance against tort liability).
- Amounts borrowed
for use in the business from a person who has an interest in the business,
other than as a creditor.
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