K-1 line 19 Return of capital vs Distribution

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May 27, 2020
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K-1 line 19 Distribution vs Return of Capital

The K-1 form in line 19 shows, say $100. The supplemental information says that $60 of the $100 is a return of capital. Do I report $100 in line 19 and use the $60 to reduce my basis in the partnership or do I show the $60 or net $40 on the return? If I show the $60 or $40, where are they to be entered?

DavidS127

Report the entire $100 on line 19 of your Form 1041 Schedule K-1, using the code(s) reported on the K-1. The entire $100 is a reduction to your basis in the partnership. $40 was a distribution of partnership assets and $60 was a return of the capital you contributed to the partnership.

See the IRS Instructions for box 19 of Form 1065 Schedule K-1 at this link for more information on what is reported in box 19.

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