K-1 box 19A

[tz7292]

If I enter a Distribution amount on line 19A from a K-1 for a PTP, does TurboTax automatically adjust the basis for that PTP or do I need to manually adjust my basis? (Also, is that even the correct treatment for the distribution amount in box 19A?

[Anonymous]

TT does not use 19A or section L for anything. it does not track your tax basis.  in fact, you could leave 19A as well as section L blank they are not transmitted as part of the e-filed return. 

PTP'S present section L on a tax basis.  so as long as the ending capital a/c  (+ the nonrecourse liabilities and qualified nonrecourse financing) is positive the distribution is not taxable.   When you sell the PTP. it will send you a supplemental schedule along with the K-1 for you to figure your capital gain/loss and ordinary income if any.   it will reflect your basis so no need for you to do so.  the broker's 1099-B will be incorrect since it only knows what you paid.   it does not a/c for the partnership's income/loss or distributions.  in addition you might be surprised.  With some PTP's some part of the gain from the sale is section 751 income which must be reported as ordinary income. 

[dtatwood86]

I have a similar situation with a Limited LLC K-1 1065. We received a distribution (Box 19A). In Section L our ending capital account is negative when accounting for our beginning capital account + net income less the distribution. However, when added to our section K ending year Nonrecourse liability share the total is positive. This would indicate we do not owe any additional gains taxes on the distribution specifically correct?

[PatriciaV]

Yes, your ending capital balance includes nonrecourse debt. If the distribution did not exceed your adjusted basis before the distribution, it was not a taxable distribution.