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vanwinmr
Level 2
April 13, 2020
Question

Passive Income

Can I offset a passive loss to the retirement distribution on 1099K?  We withdrew monies from retirement acct to invest in a partnership. We are listed as limited partners.

    4 replies

    DavidS127
    DavidS127
    Alumni - Intuit
    April 13, 2020

    No, a retirement account distribution reported on 1099-R is not considered income from a passive activity. 

     

    A passive activity is either (a) a trade or business in which you do not materially participate, or (b) a rental activity (unless you're a real estate professional).

     

    See IRS Publication 525 at this link for details.

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      vanwinmrAuthor
      Level 2
      April 14, 2020

      Can the initial investment to partnership be used for any other deductions? 

      RobertG
      RobertG
      Alumni - Intuit
      April 14, 2020

      The initial investment in a partnership is not deductible.

       

      You report the gains or losses from the partnership each year.

       

      Your initial investment is not considered until you sell or otherwise dispose of your partnership interest. 

       

      Then it is part of your basis in the partnership, and determines if you made a profit on the disposition.

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