I am looking for clarity on how to enter information about a Final K-1. I am a passive member of an LLC that sold the buildings to a third party in 2020. Since the buildings were sold by the LLC, the LLC has been dissolved. I received my final distribution (Box 19). Amounts for 1250 gain (Box 9c) and 1231 gain (Box 10) are listed in the K-1. I understand how the enter the Box 9c, 10, and 19 information into Turbotax. However, I am confused on how to categorize the "sale". I have seen different posts in the discussion board including one with a response from @Rick19744 indicating to mark "Complete disposition" and use my distribution as the sales price,
while another with a response by @DavidS127 indicates "Disposition was not via a sale" and to not enter a sales price,
Conceptually, entering no sales price seems accurate since I did not sell anything, but also seems like a red flag to the IRS. I have been tracking my basis over the years, and while it is close to the final distribution, it is not the same. So if I enter this into Turbotax, I end up with a small amount of long-term capital gain on that difference. I want to make sure this is accurate and that I am not being partially double-taxed.
Regardless of which "disposition selection" you choose, you will get to the same result.
Keep in mind that you will need to update your tax basis by the final K-1 items EXCEPT for the distribution amount reflected in box 19.
One additional distinction: "Complete Disposition" will release ALL suspended losses, while "Disposition not via a sale" may leave some in suspension. This may not apply to your case.
Thanks, @Rick19744. I appreciate the quick reply and all of the clarifying information. I have not included the final distribution in my basis calculations. I went back through my basis calculation spreadsheet and found that the gain matches the amount of business interest limitation that was in a prior-year K-1. My understanding is that the limitation reduces my basis since it is a partnership and not an S-Corp. I hope I have this correct. There is no mention of Section 751 gains in the K-1. Nor is there a code AB listed under box 20 where I would expect it to be.
@nexchap- I do have suspended losses from last year, so it is important that I free those up. Thanks for the pointing out the distinction.