TT has me paying capital gains tax on capital that I invested into a real estate venture. And I don't believe that I should be paying capital gains tax on capital that I initially invested into the venture. Can someone please let me know how I reflect this in TT so I am not paying capital gains tax on my initial capital investment? Below is information regarding how this happened in TT and a redacted copy of my K-1 for reference to my question.
In 2021, I invested $178,733 into a real estate fund. Last year there was a sale of a large portion of the assets. There was current year net income of $366,492 + returning $43,361 of my capital investment for a total 2024 distribution of $409,853 resulting in an ending capital account of $135,372 that is reflected in Part II L of the K-1. I have confirmed with the fund that the aforementioned $43,361 capital distribution is included in Part III 9a. TT is prompting me to enter the amount in Part III 9a, which is resulting in capital gain tax on the $43,361 in capital that was distributed back to me. I'm using TT online premium 2024. Thank you in advance.
