k-1 entry

[FS1966]

Hello,

My real estate partnership was dissolved in 2021, and therefore I didn't receive any K-1 for 2022. Do I just delete the K-1 for that particular partnership for the 2022 filing? Or does it need to be still kept there in TurboTax for any future profit/loss calculations for other partnerships (not related) to be dissolved later?

Thank you.

[Anonymous_]

Did you receive a final K-1 for 2021 (the year of dissolution)?

If so, and you entered that K-1 into the 2021 program, you can delete the 2022 entry.

[FS1966]

Thank you.

[Mike9241]

if you had any unrecovered tax basis, that would be a write off in 2021. Turbotax probably wouldn't ask if final K-1 not marked or you may have exhausted your tax basis and have nothing more to write off. 

[FS1966]

Thank you. I'm trying to understand what you're saying. 

What is unrecovered tax basis? Where will I find out if I've 'unrecovered' tax basis?

This is my understanding. Since this is/was a real estate partnership, they do all this accelerated depreciations in the first few years, and that can be used against any profit from the sale/dissolution of any other partnerships going on that year. And if there is no sale going on in a year, and therefore I've no profit to write it off against, those depreciation 'expenses' can just accumulate (and never expire) for future use. So I'm thinking that if delete the K-1 entry for this dissolved partnership, whether I'll somehow lose all the accumulated depreciations/expenses that I can use in future against the sale/profit of the next real estate partnership (I still have a couple of more left).

Thank you in advance.

[MosesHomes]

Not so simple, It al depends how you took the acellerated depreciation. If you qualified as REPS then you took some depreciation losses or all each year and unused portion cariired forward to the next year. In 2021 Final K1 you would have recapture gain based on your OUTSIDE BASIS. The Partneship carried an INSIDE Basis on the K1 but you as a partner is different calculation. All you put into Capital and contribution increases your basis and all you got in CASH and how you reported is with either decrease your basis or maybe increase it.

If you indeed have loss carrying forward that was limitted, Turbo tax has it already calculated and should carry forward regardless if you delete the old final K 1.

[Rick19744]

You can't receive an accurate response unless you address the first question asked by @Anonymous_ 

Did you receive a final K-1 in 2021?

If you did, how did you handle this in 2021?

[FS1966]

Thank you again.

I'm pretty sure I marked the 2021 K-1 as the final one. But I can't seem to see that anywhere in the 2021 tax return.

But it seems to me that you're saying  that I can delete the K-1, and any loss still to be carried forward will be carried forward.

[MosesHomes]

Form 8582 shows all your carry foward losses if you in deed had qualified for Real Estate Prefessional Status and  treated all your real estate activity as ONE trade of besiness regarless of some were active and some were passtive. If you were not qualify under the 9 election to deduct the passive lossess each year and carry them forward until Final K1 one then you basically taking all the losses in 2021 and its done with. Only a REPS status carries the losses forward so you have to you your individual status how you took the losses. If you materially participated thenn you may have taken then yearly to a certain limit and carry forward. If its rcorded on form 8582 then that will carry it forward the Final K 1 is done with.

[MosesHomes]

No, if it's treated as a first in first out K1 then nothing gets carried forward when you get final K1 you use all the suspended losses at that year agains passive or ordinary gains and done.

If you qualified for REPS the you could have carried losses forward so you have to make sure how you claimed these losses from day one.

Regards