Skip to main content
Level 5
April 8, 2020
Solved

taxpayer's final K-1 has negative ending capital

  • April 8, 2020
  • 1 reply
  • 21 views

Taxpayer received final K-1 (limited partner) that have negative ending capital balance.  Taxpayer did receive $119 distribution during the year.  But, Partnership was sold and he did not receive any residual from the buyer.

1. do I report $119 as capital gain distribution?  If yes, where to input this?

2. do we need to report ~$3k negative capital as gain?

 

This topic has been closed for replies.
Best answer by PhoebeRoberts

Distributions in excess of basis do go on Schedule D, yes.

1 reply

PhoebeRoberts
Intuit Community Champion
April 8, 2020

You just run everything through the usual basis calculations. Your guy likely has distributions in excess of basis and/or losses suspended for lack of basis.

Capital account is not necessarily indicative of basis.

hgtcAuthor
Level 5
April 8, 2020

So, we need to report $119 excess distribution through long-term capital gain in Sch D?

PhoebeRoberts
Intuit Community Champion
April 8, 2020

Distributions in excess of basis do go on Schedule D, yes.