How do I get K1 line 19, code A distribution to show as gains properly?

Forum|Forum|6 years ago
June 6, 2019
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MichaelDC

Employee

Schedule K-1 for partnerships reports distributions to the partners in box 19A.

Since you have to report your share of the partnership income or loss for the tax year whether or not the income is distributed to you in the same year, the amount of your distribution is not usually reported on your tax return for the year it is distributed.

You do need to keep records of amount contributed and distributed to at some point be able to determine if you have a gain or loss on disposition of your partnership interest or when you have already reported losses that are more than your investment in the partnership. This is similar to keeping track of your stock basis for gain or loss computations.

Since you have already reported the income from the partnership on other income lines you do not need to report the amount of distributions on your 1040 (and would be double reporting if you did).

ElenaFoucher

What if my Schedule K1 (for partnerships) Box 19 (A) distributions are not from the original investment - it's not returning the capitol invested, but are profit made from the investment? Is this considered taxable income?

In my case I invested in a real estate partnership, and all of the partners receive a portion of the profits each month. If this is considered income, I cannot figure out where to declare it. Everything just says, "declare it on your personal income tax return." But where?

It's not a lot of money, but if I end up having to pay taxes on it later, plus interest fees for being late, it starts to add up. 😛

Thanks in advance.

PatriciaV

Employee

Any distributions you receive from the partnership that are more than your total basis in the company are reported as ordinary income. TurboTax will help you report this income, based on the information you enter for the investment.

See this IRS worksheet for help calculating your adjusted basis in the partnership. You'll need this information in order to reduce the taxable income from the distributions.

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