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Domestic partnership ended in 2017 & final K-1 provided. Row 10 has $129,247 loss & TT 1040 row 14 has -$129,247. Can a portion of this loss carry to 2018?

bjcycle — Sat, 01 Jun 2019 14:18:48 GMT

The partnership had a significant loss when it sold a property that was originally purchased for much more. The partnership ended in 2017 and the capital account (section L) noted the current year decrease of -$120,767. Part III row 10 had a 1231 loss of $129,247, and this went on my form 1040 row 14. Because of this and other deductions and exceptions, my taxable income is very low and i owe no federal taxes in 2017. It is possible to adjust this row 14 amount (from form 4797) for 2017 and carry over a portion of this loss to 2018. Doing this would permit me to adjust the loss to a level to maintain my $0 taxes owed in 2017, while using the balance of that loss to carry over to 2018 to minimize my taxes in 2018. Is this permitted and can this be done in TT?

You are not permitted to pick and choose which tax year y...

Rick19744 — Sat, 01 Jun 2019 14:18:50 GMT

You are not permitted to pick and choose which tax year you report either your income or your losses. These need to be reported in the appropriate tax year based on your method of accounting; which as an individual is most likely cash basis.

The other piece to this final K-1 is determining your overall gain or loss on this investment. This is determined based on your basis schedule that hopefully you have maintained and updated annually for the applicable lines on the K-1.

The K-1 Part II Section L may or may not be your tax basis.

Your ability to claim the current year loss is also determined by whether you have sufficient basis. So having an updated basis schedule is critical to maintain and understand how it impacts each year and the final year.

Thanks for prompt response - confirming my assumption on...

bjcycle — Sat, 01 Jun 2019 14:18:52 GMT

Thanks for prompt response - confirming my assumption on the loss this year. Yes, been keeping track of the basis and have received yearly K-1's from the partnership's accountant (with section L capital account as accurate.) including yearly statements of increases and decreases. thanks again

Welcome

Rick19744 — Sat, 01 Jun 2019 14:18:53 GMT

Welcome