The K-1 is an LLC that owns a townhouse complex. I'm not sure if I'm entering the "pretend" K-1 correctly and I don't have the actual K-1 yet as this is a test for 2024 using the 2023 software, but, I know the operating losses are in Box 1 for the K-1 1065.
But, when I fill out a 4797 for Property C, it is not releasing the suspended losses from Property A, either. It's releasing a very tiny percentage on the 8582 form, at the bottom of the form, but both Property A and the K-1, but the vast majority of the losses for both are showing as Unallowed. Am I doing something wrong in the software?
And, given that this would be a K-1 1065 that the sponsor told me is an "equity kicker" for a loan I'm considering making to the LLC, am I somehow entering the K-1 wrong? No matter what I do, it seems to show up as passive losses, though the sponsor tells me it should be net operating losses, and I'm not a managing member. I
It doesn't seem like it should be this confusing/complicated, but I can't seem to generate a tax return that flows such that either the suspended passive loss from Property A or the current year Box 1 losses from the K-1 are offsetting any of the capital gain from selling the real estate using 4797.
Many thanks for any insight! I'm happy to provide an example of how I filled it out... It looks like I could attach a document or an image to this thread. Is that how people normally share it?
Rought numbers
- 20,000 W2 income
- 250,000 from selling the investment real estate
- 150,000 from the Box 1 of K-1
- 20,000 of suspended passive losses from Property A (not sold)
- 2,000 of current passive losses from Property A
- 15,000 of suspended passive losses from Property C (sold real estate in same year)
- 1,000 of current passive losses from Property C
- No other income
thank you!
