Yes and No. Yes, there is something else to do besides enter the FMV for the distributions and no, don't enter the FMV as the distribution. You need to enter the Partnership's Adjusted Basis for the distribution amount.
Your basis is another term for the value of your investment in the company as of a specific date. The "FMV" represents value at the point of transfer - so the ending value in the Partnership and the beginning value in the REIT. This value is calculated from your initial purchase (or investment), which is represented by "Partnership's Adjusted Basis", plus or minus any income or loss over the operating years minus any other distributions taken over the years. The "adjustments" have been reported in various boxes of your K-1s throughout your ownership and have already been reflected on the appropriate year's returns. So, since the FMV is less than the Partnership's Adjusted Basis you have already reported this loss. If you enter this FMV this year, you will be "doubling" the loss you have experienced and your return will be delayed and adjusted by the IRS.
@scpanish
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
