Question

K1 Disposition

Forum|Forum|6 years ago
April 16, 2020
1 reply
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I ended a K1 partnership this year. However, the "buyback" will be completed over the next 3 years with a distribution each year. For 2019 do I report the total sale price and capital gains or just the 1/3 redemption received thus far. My partner share on 2019 k1 is listed as 0% but the box for final k-1 is not checked. If I report the total value of the sale, turbo tax creates a capital gain tax for the entire amount, of which I have only received 1/3. If I only report 1/3 do I similarly only report 1/3 of the cost basis, and select "disposed of a portion of my interest" in turbotax?

K

KarenM90

You need to report it as an installment sale, on Form 6252.

Type Installment Sales into the search box and choose the Jump To link.

On form 6252, you will be reporting the entire sales amount, as well as the payments received in the current year. TurboTax will make the correct calculation of income for the year based on the on screen interview.

Here is a link with some more details: Form 6252 Tips and Info

You will still report the information regarding 2019 operating income and deductions from the K-1 in the

S-corps, Partnerships, and Trusts section under Income & Expenses.

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