Sold all interest in a Limited Partnership: Does the gain/loss from this get reported on Line 6 of Schedule NJK-1 (Form 1065)?

[KXopherS]

Per title, I sold all interest in a Master Limited Partnership (MLP) last year and need to report the income from this sale on my NJ state tax return.

I already received the federal Schedule K-1 (Form 1065) from the MLP which also contained the Sales Schedule with information on the disposition (such as "Gain Subject To Recapture As Ordinary Income") that I used in conjunction with the details on the 1099-B to calculate the actual capital gain for the sale of this MLP. So I'm all set on the federal tax return.

While the state K-1's won't be available until June/July, the MLP noted that there was no activity to specifically report to NJ, so I'm trying to manually create the Schedule NJK-1 myself.

I entered the ordinary business income (Box 1) from the federal K-1 into Line 1, Col A and zero into Col B of the same line on NJK-1. That flows down to Line 4 with the same values for Col A and B.

Now, on Line 6 "Net gain (loss) from disposition of assets as a result of a complete liquidation" is the relevant part about my question:

1. Should I enter the actual capital gain that I calculated using the K-1 Sales Schedule and 1099-B?

2. Or should I enter just "Gain Subject To Recapture As Ordinary Income" that was reported on the K-1 Sales Schedule?

3. Or just leave it blank (since I'll be attaching the federal Schedule D that already includes the actual capital gain derived from the disposition)?

My apologies for the lengthy post. Any clarification would be appreciated.

[KXopherS · Accepted solution]

Upon further research, I found the following publication (GIT-9P) on the NJ Department of the Treasury publications page, specifically referring to Question 7 (page 35) below:

So, according to above, it appears like Line 6 on Schedule NJK-1 ("Net gain (loss) from disposition of assets as a result of a complete liquidation") only needs to be populated when the entire partnership has been completely liquidated.

In my case, I am just a single partner who sold my share of interest in the MLP (i.e. the partnership itself continues to operate and has not been completely liquidated), so Line 6 on my NJK-1 can be left blank.

With that said, I will manually create the NJK-1 for myself and attach it to my NJ tax return accordingly.

It's unfortunate that none of the experts here could help, but I hope this understanding is correct and will assist others who may cross a similar path as mine. Cheers.