Do I have to report form 7217 if K1 final is checked and box 19 has code c

[HKRAY]

Hi,

I have a final K1 with box 19 code c in it. This K1 was marked final as the investment in this partnership was moved from this partnership entity to a new partnership entity. The K1 has an addendum section where it simply mentions it as a ‘Capital transfer’.
1. Do I have to submit a form 7217 ? Box 19 has code c but there was no ‘actual’ distribution. Also, this K1 is an investment in real estate development which when liquidated returns $ and not a property.

2. Turbotax says it doesn’t support e-filing 7217. Can I e-file the federal return and mail just the form 7217 ? Or do I have to print/mail the entire federal return with form 7217 ?

Have to submit the extension by 10/15. Appreciate any guidance from the experts out there.

Thanks,

HK. 

[Mike9241]

form 7217 say it must be files when IRC section 732 applies.

IRC Section 732 applies to the basis of distributed property in partnerships, determining how the basis of property distributed to partners is adjusted. It governs both non-liquidating distributions, where partners receive property without terminating their partnership interest, and liquidating distributions (other than cash or marketable securities treated as cash - code A), where the partnership dissolves. The section ensures that the basis of distributed property aligns with the partner's outside basis, preventing double taxation on distributed property. For example, if a partner's outside basis is reduced by the amount of cash and the adjusted basis of property received, any excess is treated as a capital gain under IRC Section 731 (a).

this is not a form that can be filed separately. you'll need to mail your entire return with this form