I owned Management Incentive Units (similar to stock) for a company that was sold in 2018. Shareholders were paid out 2/3 of the monies in 2018 and the remaining 1/3 in 2020. Not being a tax guy, I had someone do my taxes in 2018 due to the Schedule K-1 (form 1065).
They listed the monies received as long term capital gains from Schedule K-1 (line 9a) onto schedule D (line 12), although my actual distributions from line 19 were less than the total. So I was taxed on the larger amount for capital gains than the smaller amount I received. The schedule K-1 showed an ending capital account (section L) that was the difference between the "current year increase" and the distributions. Sounds good to me so far. 2018 tax impact: Paid capital gains on the larger amount.
Received a new Schedule K-1 (form 1065) the reflected the beginning capital amount (section L) from the 2018 schedule K-1 and also showed a current year net income. The ending capital account (section L) is the amount that I should be paid in 2020. 2019 tax impact: None? I did my taxes online with turbo tax and entered all of the details for schedule K-1. I guess this is expected since I did not receive cash in 2019. I looked at TurboTax forms and don't see a mention of this "capital gain" on Schedule D.
Received a 2020 Schedule K-1 and a check. Section L shows a beginning balance that was a carryover from 2019 and an ending balance of 0 due to the distributions. There were no "increase" in 2020. The distributions (section 19) reflect my pay out. Tax impact: None?!??!? I entered Schedule K-1 in TurboTax and don't see any impact, no entries in Schedule D?
What am I doing wrong? I think I need to amend my 2019 return to edit Schedule D and show the capital gains listed on the Schedule K-1 (section L)? There were no capital gains in 2020 on Schedule K-1