Some follow-up comments:
- Your initial post indicated that you began the investment in 2019, however, you start with 2021 in your recent response. What happened in 2019 and 2020? No K-1?
- Your tax basis cannot go below zero. Forget any liabilities when determining your tax basis. These are really used in determining if allocations can be made at the partnership level and only complicate this equation for you. In the end, they should net out having no impact.
- Based on the additional information:
- Tax basis at the end of 2021 is $3,469 (35,000 - 31,531)
- For 2022 you begin with the 3,469 and first reduce the basis by the distribution of 587 leaving 2,882. You then reduce the basis by 2,882 (of the 5,187 loss) arriving at zero. Not sure how your actual return handled this, but this is what SHOULD have occurred.
- For 2023 your basis begins with 0, increased by the 32,960 and 12,337 which totals 45,297.
- So assuming no K-1 in 2019 and 2020, when TT asks for your tax basis or whatever terminology they use, you would enter the 45,297. The sales price is the 42,888 distribution. TT should then reflect a small capital loss on form 8949 and Sch D of 2,409. This is arrived at by subtracting the distribution (sales price) from your tax basis; leaving you with the 2,409. A positive tax basis remaining means a capital loss, if this would go negative that would indicate a capital gain.
*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.
