Basis and excess distribution

Forum|Forum|5 years ago
October 14, 2020
1 reply
10 views

Hello everyone!

i am working on a 1040 return where the k1 has distributions in excess of basis. I am taking the excess amount as LTCGs. I was wondering if i can take the same amount as "contributions to basis" since that amount is being taxed?

Thanks for your time.

Lacerte Tax

This topic has been closed for replies.

Best answer by rbynaker

Indirectly that's already what you're doing. Say you have a $10K distribution in excess of basis. Normal distribution rules would have you deduct the $10K from the basis of $0, leaving you with a basis of -$10K. By correctly reporting this on Schedule D, you are adding $10K to the basis of -$10K to bring it up to $0.

rbynakerAnswer

Level 13

Indirectly that's already what you're doing. Say you have a $10K distribution in excess of basis. Normal distribution rules would have you deduct the $10K from the basis of $0, leaving you with a basis of -$10K. By correctly reporting this on Schedule D, you are adding $10K to the basis of -$10K to bring it up to $0.

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