Attempting to work through things of this nature on a forum such as this is difficult, vs a one on one. So bear with me.
- Are you saying that when your clients partnership invested in another partnership they acquired 10,000 units?
- And now the partnership redeemed 2,778 units as reflected on line 19C
- So now you have 7,222 units in the partnership?
- But no cash?
Still trying to get an understanding of the facts:
- You indicate that you received the shares at a higher FMV, but your original facts indicate this was a non cash distribution
- Who's determining the FMV?
- Typically when something like this occurs, there is cash involved
- There's no benefit in saying the FMV has increased unless there is some type of transaction that validates the FMV.
- You indicate the original K-1 was for 2020. What was done with the K-1 for 2020?
- How was that reflected on your client's 2020 form 1065?
- Do you have an account titled "investment" on the balance sheet of your client?
- I've handled a significant number of Private Equity Funds, so it's not like this is an area that I have not dealt with in the past.
*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.
