Question

Final K-1 due to merger. How to indicate disposition?

Forum|Forum|7 years ago
June 1, 2019
1 reply
0 views

I was a passive owner in a business (Business 1). That business was merged with another business (Business 2) as of 12/31/17. I have received my final K-1 from Business 1. In 2018, I will have ownership in Business 2 as a result of the merger. I know to select "This partnership ended in 2017" but am stuck when it comes to selecting disposition. Which method should I choose?

No Entry

Complete Disposition

Disposition was not via sale

Sold and am receiving payments

TurboTax Self Employed Online

I

Irene2805

Select Disposition was not via sale since it was a merger.

W

will2402-

I have a similar situation. For tax purposes in the merger, PTP Business 1 was terminated, and PTP Business 2, which I also owned shares of, survived. However, within Turbo-Tax, I have suspended losses on the K-1 of Business 1 that are not carried over to the K-1 of Business 2, and they also do not show up on the original K-1 sent to me by Business 2. If I check "Disposition was not a sale," those losses simply remain on Section A of the Business 1 K-1 as suspended losses, but I need them to show up on the K-1 of Business 2. What is the proper (meaning legal) way to transfer those suspended losses over to Business 2?