k-1

[dgsiegel]

I received a final k-1 for Limited Partnership that I used to work at.  I did not invest any money ($0 basis) but the business was sold in 2023.  I was money from the sale for a small interest I had in the business.  The K-1 I received only lists 

5- Interest income

9a- Net Long term capital gains

19- Distributions

20- A & B

How do I answer the TT questions Sale price, Partnership Basis, Ordinary Gain, 1250 Gain?  Basis I can assume is $0 (I looked back at the prior K-1). But it does not allow me to enter Long Term Gain ... only Ordinary Gain

Any guidance would be greatly appreciated.

[PatriciaV]

Have you entered Schedule K-1 under Investment Income? The income from the partnership may affect your taxable income for the year. Review these steps for reporting the end of your partnership investment:

1. Describe this Partnership; "This partnership ended in 20XX" and "Complete disposition."
2. Tell Us About Your Sale: "Sold Partnership interest." This allows you to report the gain/loss.
3. Enter Sales Dates: initial contribution date and date the investment shut down.
4. Enter Sale Information:
      Sale Price = 0
      Partnership basis = initial contribution (if any) adjusted for any activity from Schedule K-1 (see below). 
5. The next page displays the gain/loss summary for the investment.

You will need to calculate your adjusted basis in the partnership, which would include any profit or loss that was reported on prior year Schedules K-1 less any distributions reported to you. It's unlikely you have a zero basis if the K-1s reported income, long-term capital gains, etc., and you received distributions.

Any gain or loss from the sale would be long-term, as long as you were a partner for more than a year. Otherwise, the sale would result in a short-term gain or loss.