topic Question on how to report a tax loss on sale of a partnership in Investors & landlords

Question on how to report a tax loss on sale of a partnership

ajsmall65 — Sun, 15 Dec 2024 18:10:35 GMT

I have been invested for 4 years in an investment partnership. I earned book income of $98,704 during this period. The final K-1 estimate and the prior years K-1 have allocated $227,894 of taxes to me. That means I have to report a tax loss on the sale of this investment of $129,190. Where and how do I do that?

Re: Question on how to report a tax loss on sale of a partnership

Mike9241 — Sun, 15 Dec 2024 20:21:37 GMT

did you receive any distributions? prior or potentially for the current year. If not something seems wrong.

to determine any gain or loss on sale or termination you need to know your tax basis.

Re: Question on how to report a tax loss on sale of a partnership

ajsmall65 — Sun, 15 Dec 2024 23:52:17 GMT

Yes received distributions and now I’m fully redeemed out ( except for a small holdback upon audit). My book basis is zero so to get my tax basis to zero I will have to book a $129K loss. Seems like they overstuffed me as a withdrawing partner. Seems wrong.

Re: Question on how to report a tax loss on sale of a partnership

RobertB4444 — Mon, 13 Jan 2025 23:16:23 GMT

The loss on a the sale/closing of the partnership is entered as the sale of an investment. You'll enter what you paid for the partnership and then enter what you received (which may be zero). The loss will be entered as a long term capital loss (since you held the property for more than a year). That loss can be written off against other capital gains or deducted against regular income at the rate of $3,000 per year.

Any deductible expenses you had for the partnership should be entries on the K-1 and will be deductible in the current year.

@ajsmall65