you invested $25K
loss and distributions in prior years reduced your tax basis to $10K at the beginning of the year as reflected in schedule L
line 9a which is what the partnership reported as LTCG increases your tax basis to $45K
line 12 (section 179 deduction) which i do not understand would reduce your tax basis back to $10K. the issue i see is how this could occur and the partnership have $45K which it distributed to you
resulting in a $35K gain on termination
I think the k-1 is wrong but since i don't have access to the partnership accounting, I can't be sure.
it would make more sense if line 12 was zero or 9c was $35K (or less). The norm for a real estate partnership is to have 1250 Gain (9c) when property is sold. It represents the portion of gain attributable to depreciation taken. line 9a includes line 9c
so maybe it should be $10K beginning tax basis + $35K LTCG (9a) giving tax basis of $45K for which you received a distribution of $45K so no gain or loss upon termination which is normally what is to be expected if you owned your interest from inception.
having a 179 deduction in the final year seems impossible because 179 is taken in the year the asset is acquired. but if disposed of in the same year no 179 is allowed.
