topic Schedule K-1 in Business & farm

Schedule K-1

wxal1208 — Wed, 17 Mar 2021 22:21:41 GMT

I received schedule K-1 for stock I brought and sold. When I try to file my taxes it asks me to describe how I disposed my partnership (No entry, Complete disposition, Disposition was not via a sale, Sold and am receiving payments). I not sure which to choose. Also all the information is zero other than Part II L with ending capital account also being zero. When I choose Complete disposition, Disposition was not via a sale, or Sold and am receiving payments, it also ask me the description, purchase, sale date but the in the summery it has varies DA Sell date with unit but no sale or cost price.

Re: Schedule K-1

Mike9241 — Thu, 18 Mar 2021 00:38:42 GMT

assuming this was a PTP (publicly traded partnership) or MLP (master limited partnership also traded on a public stock exchange).

with the final k-1 you should have received a supplemental schedule to report the sale

enter the K-1 info

check the box PTP

check the box final k-1

check the box partner sold or otherwise disposed of the entire interest in 2020 (you sold it thru your broker)

quickzoom to enter disposition info (this is info other than reported on 1099-B)

in part II check 1a and 1a(1)

on line 2 enter sale date

on line 3 enter var (various should appear)

on line 4 indicate purchase from the drop down menu

on line 5 enter only the amount from the sales schedule that is listed as ordinary income ( to be reported on 4797 line 10)

on line 7 enter 0

on line 9 enter the same amount as on line 5

now you need to correct the 1099-B reporting. it should show the cost basis was not reported to the IRS (that's proper because the broker doesn't have a clue as to what your correct tax basis is)

your correct tax basis is either

what the sales schedule shows as cost basis + the gain subject to recapture as ordinary income

what the sale schedule shows as purchase price +/- cumulative adjustments to basis + the gain subject to recapture as ordinary income

not sure your version of Turbotax can handle a K-1 or if it does you have to do the above in step-by-step mode.

Re: Schedule K-1

wxal1208 — Thu, 18 Mar 2021 18:29:23 GMT

It is PTP but I have turbotax premier so your step doesn't match. I get stuck on questions regarding "Describe Partnership Disposal chooses No entry, complete disposition, disposition was not via a sale, or sold and am receiving payments.