Final K1 - Sale Price and Basis calculation (Multiple TT live agents have offered wildly different advice)

[sakethuk2]

Total novice situation and I apologize for not being able to get this right. I have worked with 4 TT live agents so far and each gives different advice.

Situation:

• Invested in a partnership in Sep 2020 for $30K
• Additional capital call in Nov 2023 for $3.6K
• Return of capital (Distributions)
  • $33.6K in July'24
  • ~$17K in July'24
  • ~1.4K in Dec'24
  • Total in 2024: ~$52K
  • Final K1 for 2024 received in Sep 2025
• Basis (capital account) calculated at start of 2024: $26K
• Net 2024 income: $27K
• Distribution: $52K
• Ending Basis 2024 (capital account): 0

I have followed TT prompts as follows:

• Partnership ended in 2024
• Complete disposition
• Sold Partnership Interest

Now I am at the Enter Sale Information and I am bamboozled (as are TT Live Agents) on what to enter on the Sale Price and Basis.

On the one hand, it seems like there wasn't a sale, since the assets were liquidated and distribution made. Which makes the sale price and Partnership basis as 0. On the other had, I wonder if I should be using $52K as the sale price and $26K as the basis. Or is it $52K as the sale price and $0K as the basis? 

Tax Gods, I put myself at your mercy. :(

[sakethuk2]

@Rick19744 - please help :(

[Rick19744 · Accepted solution]

Based on the information in your post and K-1:

• Don't get hung up on the nomenclature 
• For purposes of the "sale" component, it appears that there is no gain or loss
• "Sales" price is the $52,666 reflected as the distribution
• Cost basis is also $52,666 - beg of year $26,389 plus the current year income of $26,277
• You should also enter the Section 1250 recapture amount of $2,625; there should be a box to enter this as well

[sakethuk2]

Thank you sir! This makes it clear. 

I was getting conflicting advice from TT live support and got myself spun up on it. 

[Rick19744]

Welcome