Nothing concerning this rental property should be reported on SCH C of "any" tax return for "ANY" tax year.
Your personal 1040 tax return should have nothing on page 1 of the SCH E concerning this property. The partnership reports the sale through the SCH E on the 1065. If this is the last thing the partnership needs to dispose of prior to dissolving the partnership, then that 1065 will be marked as a "final" 1065 and all K-1's issued to all partners will be marked as a "final" k-1.
When you enter the K-1 on your personal tax return it will only use page 2 of the SCH E on your personal tax return, and that's it (for this specific rental property.)
YOu will not report the sale of this rental property on "ANY" personal 1040 tax return. It's reported on the 1065 return. The K-1 issued will show your share of the gain (or loss) on the sale, and if you just enter the K-1 exactly as printed, that's all you do on the personal tax return.
As for the ownership issue, that's a totally separate legal issue outside of taxes, that will most likely bite you big time if your state taxes personal income. But while the state tax filing will make this apparent, it won't affect your tax filing as much as it will affect the legal right of the partnership (instead of you) to sell it.
