Thanks HACKITOFF. My bad... Yes, the Sec 1250 recapture and long term capital gains should be positive as you state given that's income.
Based on your suggestions & my understanding, I did the following for this investment in TT. Would appreciate comments on whether all these seems right. Also have related questions.
Firstly, marked "Disposed of a portion of my interest in partnership during 2019". Then, chose "Sold Partnership Interest". Then provided proper Purchase & Sale Date.
Then for "Regular Gain or Loss" section:
a. Sales Price & Selling Expense - Left these blank (just like one would do in regular sale; given enclosed letter that says disguised sale treated same as regular sale). Question: Correct?
b. Partnership Basis - Using "Partner's Adjusted Basis Worksheet" provided as supplemental info. Question: Which one of the items below (or something else?) apply?
- Adjusted final basis of Partnership's Interest At-risk basis - Line 11 final value (OR)
- Is it the difference between Line 11 (final adjusted basis) & Line 1 (Adjusted basis from preceding year)?
c. 1250 Gain - Filled in the value ($13,223) from enclosed letter per info provided in original post. Question: Correct?
d. Ordinary Gain - Used value from "Ordinary Gain (loss) from Form 4797" provided in Statement A - QBI Pass-Through Entity Reporting (Info reported in accordance with Section 199A-6 Schedule K-1 Line 20, Code Z". Question: Is this correct given the only other gain value provided in enclosed letter is Long Term Capital Gain which I could provide elsewhere in TT questionnaire.
Per your response earlier, I assumed there were values in Boxes 9a and 9c (despite they being empty) and filled in values provided in enclosed letter as part of TT questionnaire. I also skipped the value in Box 19 and didn't use in TT questionnaire (in line with your suggestion & also enclosed letter that states there was no distribution per-se). Question: Is my understanding of your inputs and these actions correct?
In one of the TT questions - Section: Tell Us About your Section 1250 gain: Did your K-1 list any of your unrecaptured Section 1250 gain as coming from "Disposition of an interest in a partnership". Question: There is nothing that is explicitly stated in K-1. But in Item J, Part II (Partner's Share) - the checkbox for "Check if decrease is due to sale or exchange of partnership interest" is marked. And given there was a partial disguised sale, should I answer "Yes" for this question and mark the entire Section 1250 amount as coming from disposition (or) should I answer 'No'?
Question: How do we capture info in TT related to decrease in Item J value - Partner's share of Profit/Loss/Capital which went down given partial disguised sale? The TT questionnaire never asked anything towards this partial [disguised] sale resulting in lowered partnership interest.
Thanks
