how to enter final K1

[askadis]

I just received a final K1 for a real estate partnership.  The Beginning Capital Account is negative, -$7,000. The next line shows a Capital Contribution of $6,500 and then there is a small positive contribution contribution of $500 from this year's operation.   The ending Capital Account is $0.  How do I enter this? Does it generate passive income or ordinary income?

[Irene2805]

Just enter the K-1 for the partnership as it appears on the form you received.  The capital account adjustments themselves do not generate income.

TurboTax CD/Download

1. Click on Federal Taxes > Wages & Income [In TT Self-Employed:  Personal > Personal Income > I'll choose what I work on. 
2. Under Other Business Situations, click on the box next to Schedules K-1, Q.
3. Click Yes on the next screen, Schedules K-1 or Q.  
4. On the Tell Us About Your Schedules K-1 screen.  Click on the Start/Update box next to Partnership.
5. If you have already entered K-1 information, you will see the Partnership/LLC K-1 Summary screen.  Click Add Another K-1 to enter your information  (or click on Edit to continue with the existing form entry).    
6. If you haven't started entering K-1 information, continue through the screens, entering the requested information.

 TurboTax Online

1. Click Wages & Income.
2. In the S-corps, Partnerships, and Trusts  section, click the Start/Update box next to Schedule K-1.
3. Continue with step 4 above.

[askadis]

I had been lead to believe that since I had used loses to offset income in prior years, that I would effectively have to now recognize these losses as taxable gains. This is a really old partnerships from decades ago when there were real estate tax shelters.

[askadis]

I was told by the accountant at the partnership that there would be recapture for the losses that I took in prior years.  From year to year changes in capital accounts to impact tax liabilities, however bring the capital account from negative $24,998 to $0 generates $24,998 of income.  Where would I enter this?