Yardley CPA Posted February 8, 2015 Report Posted February 8, 2015 (edited) Client received K1 from dissolved partnership which included a cash distribution on Line 19A of just over $500. It is not automatically carrying to the 1040. Should it be? if so, to Schedule E? I have very little experience with 1065's and would appreciate any information you can provide. Thank you! Edited February 8, 2015 by Yardley CPA Quote
rfassett Posted February 8, 2015 Report Posted February 8, 2015 The distribution only affects the basis - inside and outside. (Partners can and usually do have both an inside and an outside basis. The $500 distribution would reduce his basis. It would not flow to anywhere on the 1040. Since the partnership is dissolved you will need to calculate gain or loss of the partnership interest. 3 Quote
mcb39 Posted February 8, 2015 Report Posted February 8, 2015 Client received K1 from dissolved partnership which included a cash distribution on Line 19A of just over $500. It is not automatically carrying to the 1040. Should it be? if so, to Schedule E? I have very little experience with 1065's and would appreciate any information you can provide. Thank you! It is most likely a final distribution of his capital account; which is money he invested and has already been taxed. 2 Quote
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