Partnership Loss - Land contract Forfeiture

[TonyM]

I would really appreciate if anyone could provide any expertise on this topic.

If a partnership has a loss due to terminating a land contract, how would the loss be reported on the 1065 return?

Thank you in advance.

[Elrod]

Click on and find all your partnership info at this link.

http://www.irs.gov/publications/p541/ar02.html

[TonyM]

Yes, I'm aware of that, thanks. I was just hoping that someone had some expertise on the topic, because that doesn't really help me.

[Randall]

It may appear to be a loss, but there could actually be a repossession gain to be reported. Look up repossession gains. Simply, it could be all money previously received minus the gain previously reported. Then basis is recalculated. Face value of remaining loan minus uncollected gross profit on that amount, plus repossession gain plus cost to repossess.

[jasdlm]

Do you mean terminating an installment sale, or simply terminating a contract to buy/sell land before the transaction closed?

[TonyM]

Do you mean terminating an installment sale, or simply terminating a contract to buy/sell land before the transaction closed?

In this situation, it is terminating the contact to buy the property before the transaction was finalized.

Thanks.

[kcjenkins]

How did that create a loss? Are we talking about a sale the partnership was making, or property the partnership was buying?