@Mike9241 -- thanks for the info. The outside vs inside basis twists my brain into knots. To make sure that I understand what you're saying, I'll try your approach using data from the 1/8 partner share:
| start with your outside basis on the date of death (per appraisal) | 195 |
| add partnership income for all the intervening years per the k-1 | 535 |
| subtract partnership loss for all the intervening years per the k-1 | n/a |
| subtract distributions for those intervening years except 2022. | (130) |
| you now have a tax basis which should be higher than the cash distributions during 2022 | 600 |
| | |
| report the disposition of the partnership interest using the 2022 distributions as the selling price (2022 K-1 box 19A) | 410 |
| less the calculated tax basis | (600) |
| which should produce a capital loss to offset the pre inheritance depreciation | (190) |
| | |
| and FWIW: | |
total depreciation shown on 2022 K-1 box 9c | 115 |
| post inheritance depreciation (from actual 1065s) | 10 |
| pre inheritance depreciation (subtracting post- from total) | 105 |
