Distribution on K-1

Forum|Forum|7 years ago
June 5, 2019
6 replies
1 view

I received a final K-1 from a partnership that I had a Profits interest in, and where I had filed an 83(b) Election. The K-1 in the capital section starts with zero, has Additions and withdrawals that net to zero. There is also a distribution to me of the same amount that should be LTCG. There is no income or loss. When I enter the distribution in TT it does not increase my income anywhere. How do I get this in as a LTCG?

TurboTax Deluxe Mac

Best answer by

The distribution is long term capital gain by the amount that exceeds your partnership basis. Therefore, only the amount of box 19 A that is greater than your adjusted basis in the partnership will be taxed.

It sounds like your capital basis is showing you there was no excess gain. Any excess long term capital gain should be reported in the capital gain boxes (or ordinary income/other as applicable), which it sounds like yours are empty (often box 8-10). See the Schedule K-1 (1065) instructions for box 19:

If the amount shown as code A exceeds the adjusted basis of your partnership interest immediately before the distribution, the excess is treated as gain from the sale or exchange of your partnership interest. Generally, this gain is treated as gain from the sale of a capital asset and should be reported on Form 8949 and the Schedule D for your return. However, if you receive cash or property in exchange for any part of a partnership interest, the amount of the distribution attributable to your share of the partnership's unrealized receivable or inventory items results in ordinary income (see Regulations section 1.751-1(a) and Sale or Exchange of Partnership Interest, earlier). For details, see Pub. 541.

Read more at the instructions (page 13):https://www.irs.gov/pub/irs-pdf/i1065sk1.pdf

Let me know if you have any follow up questions.

Anonymous

What box is it reported in?

scottv9876Author

Level 2

19 Distribution Code A

scottv9876Author

Level 2

Thank you for your answer - it helps - it's LTCG due to 83(b) election

Anonymous

Your welcome. You might discuss it with whomever filed the partnership K-1, since you're running them through the partnership.

Anonymous

Answer

If the amount shown as code A exceeds the adjusted basis of your partnership interest immediately before the distribution, the excess is treated as gain from the sale or exchange of your partnership interest. Generally, this gain is treated as gain from the sale of a capital asset and should be reported on Form 8949 and the Schedule D for your return. However, if you receive cash or property in exchange for any part of a partnership interest, the amount of the distribution attributable to your share of the partnership's unrealized receivable or inventory items results in ordinary income (see Regulations section 1.751-1(a) and Sale or Exchange of Partnership Interest, earlier). For details, see Pub. 541.

Read more at the instructions (page 13):https://www.irs.gov/pub/irs-pdf/i1065sk1.pdf

Let me know if you have any follow up questions.

bbutz22901

Level 2

I have a K-1 with Boston Capital for low income housing. I originally invested $40,000. I got approx $37,500 in tax credits. I have discovered that I have not taken approx $10,225 of that amount. According to Boston Capital, I am able to carry that credit forward for up to 20 years from origination date, which was 2006. My 2018 tax credit allowed without any carry forward was only $6. So, I took a big hit to my tax liability. Given that I have
approx $10,225 in carry forward credits, where do I report a portion of that to amend my 2018 return to receive a refund of the $1775 I paid in 2018 taxes that I should not have had to pay. Please be specific with the form and line# and check-box I need to do to enter a portion of that $10,225 to receive an amended $1775 of those taxes. Thank you. Please reply asap.