Here are a few comments:
- If there is an ending date on the K-1, use that as the sale date. If not, just use 12/31/2023
- You should have been maintaining a separate "tax basis" schedule. What is listed on the K-1 is tax capital. While these may close in theory, your tax basis cannot go below zero, however, the tax capital can go below zero; as noted in your facts.
- I think your choice of "liquidation" is fine.
- Complete disposition needs to be checked as well. This will free up any suspended losses, which based on your facts you in fact have suspended losses.
- Don't get hung up on "sale price" and the liquidation. End result will be the same for tax purposes.
- For the sales proceeds use the $42,888 figure.
- When updating your tax basis for the final K-1, DO NOT adjust it for the liquidating distribution noted in the previous bullet.
- You will need your tax basis amount when asked by TT for your "cost basis".
*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.
