Didn't you receive an investor letter describing the merger and the potential tax consequences? There will be a filing with the IRS concerning the merger and describing the potential tax consequences but that is not yet available. Assuming the merger is fully taxable when reporting the sale in 2024. the k-1 items will need to be entered. Any suspended losses, which are common with PTPs will be allowed. Along with the k-1 you will receive a supplemental sales schedule that will allow you to properly report the gain. What will be reflected on the 1099-B you'll get will not be correct since brokers do not adjust your cost for the partnership's activities.
You'll have a gain/loss on sale of the difference between the sales price and your adjusted tax basis. your adjusted tax basis takes into account all the income, losses and distributions reported on the k-1s for all the years you held it. didn't you receive an investor letter describing the merger and the potential tax consequences?
since you got stock for partnership units, I'm assuming the merger is fully taxable. The sales price would be the FMV of the Six Flags stock you received.
the gain will be in two parts. the supplemental sales schedule will have a column for IRC section 751 gain/gain subject to recapture as ordinary income or similar wording. This is the depreciation taken by the partnership and reflected in the income/loss each year. The 751 gain adds to your tax basis, so the capital gain is the sales price less your tax basis as shown on the supplement increased by the 751 gain
example all numbers are for the example only. your actual number will differ
sales price $10000
adjusted basis before 751 gain $6000
thus total gain is $4000
751 gain $3000
thus the $3000 is ordinary income and your capital gain is 10000- (6000+3000) or $1000
based on hoe K-1's for 2023 the 751 gain will also be reported on 20AB of the k-1
