Sales of publicly traded partnership

[Tax Newbie]

Hi everyone,

I have a quick question about publicly traded partnership (PTP) in the year of disposition. Below are the facts:

• Sales: $15,000
• Purchase amount: $10,000
• PTP loss carry over: $3,500

Information from the Sales worksheet on the K-1 Form 1065 are as follow:

• Sales (box 4) - $15,000
• Purchase (box 5) - $10,000
• Adjustments to tax basis (box 6) - <$3,000>. Please note this is negative.
• Total gain on box 8 is $8,000. ($15,000 - $10,000 + $3,000)
• Ordinary gain/loss (box 9) - $2,500.
• Capital gain is $5,500 ( I need to adjust my basis to $9,500 so I can report a capital gain of $5,500 ($15,000 - $9,500).

I don't know what to do with the prior PTP loss carry over of $3,500. Can I recognize the PTP loss carry over ($3,500) as an ordinary loss and offset it with the ordinary gain of $2,500 from the above?

Thank you for all your help.

[grandmabee]

you would take the carryover loss on the Schedule E in year of sale

[Tax Newbie]

Thanks so much for the quick response. I was wondering if I need to adjust my basis by the carryover loss or it is already part of the "Adjustment to tax basis" (box 6 from the Sales worksheet on the K-1 Form 1065).

Thanks again for all your help

[joanmcq]

No, the loss c/f is entirely different than the basis calc. The basis calc is already taking into consideration income, losses, dirstibutions. It is in no way shape or form the same as the c/f which is due to a passive loss being freed up by the disposition of the PTP.

[Tax Newbie]

joanmcq, thank you for your help. So, take the loss c/f without worry about reducing the basis. Correct?

Thanks again for your help.

[Tax Newbie]

I've got the math all reconcile now. Thanks for all your help.