Limited partnership sale reporting of adjusted basis

Forum|Forum|3 years ago
March 14, 2023
1 reply
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Need advice. Client sold Energy Partners LP and I am trying to make the basis adjustment on form 8949. Partner instructions say to report the column they label "Gain Subject to Ordinary Income" as a negative adjustment on form 4797. They claim instructions for form 4797 are unclear in the determination of capital gain where total gain on sale is partially ordinary gain so reporting this amount generally results in the correct capital gain or loss.

Any comments? Is it safe for me to go ahead and make a negative adjustment in Column G of 4797?

ProSeries Professional

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Best answer by Accountant-Man

In Pro Series, use k1 additional info page to show sale and ordinary income. You check box for sale, enter basis and proceeds and ordinary amount.

If it was reported on 1099B, the basis on 1099B will probably be the cost, but not the basis at sale. This must be adjusted out to zero so the k1 additional info page is used.

Accountant-ManAnswer

Level 13

In Pro Series, use k1 additional info page to show sale and ordinary income. You check box for sale, enter basis and proceeds and ordinary amount.

If it was reported on 1099B, the basis on 1099B will probably be the cost, but not the basis at sale. This must be adjusted out to zero so the k1 additional info page is used.

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