The problem seems to be that the partnership return was prepared incorrectly. The property hasn't been sold. Thus, its cost and probably most other expenses regarding the property should be reflected in the ending inventory. I think it is crucial that a corrected return and K-1s be filed. Failure could prompt an IRS audit. You can't ignore what is on the K-1. The IRS sure wouldn't. A tax pro should probably be consulted as to what can be expensed and what must be included in ending inventory costs.
