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E
EFCPA
Level 2
February 5, 2021

Partnership K-1

  • February 5, 2021
  • 1 reply
  • 5 views
The final K-1 in 2020 for the partner shows a negative balance of 35,000, which resulted from distributions taken in excess of income allocated to the partner. Is this reportable as ordinary income on the partner's 2020 1040?
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1 reply

sjrcpa
sjrcpa
Level 15
February 5, 2021

Distribution in excess of a partner's basis are taxable capital gain. The sale of a partnership interest is part ordinary income and part capital gain.

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