Section 199a with multiple entries due to 1031

Forum|Forum|2 years ago
October 4, 2023
2 replies
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Hello,

I have invested in real estate through a company. Multiple small investors like me invest a certain minimum amount, and this company uses the collected investment to purchase an apartment complex. This company is also responsible for management of the property and they provide K-1 for it at the end of the year. One such property(called Property A) I invested in was purchased in 2019, and in 2022, it was sold, and its proceeds were invested in another portfolio of apartment complexes (let's call it Property B, C & D) with 1031 exchange.

Now, section 199a of the K-1 looks like the following. My question is, am I supposed to add the rental income, W-2 wages, and Unadjusted basis for all the properties listed in 199a before entering the values in TurboTax? I asked the company contact, but they could not give concrete advice beyond asking me to add it up, which logically didn't make sense. Please note the K-1 I received is only for Property A, not separate K-1 for property B, C & D. I saw responses from @ThomasM125 @Mike9241 and @Irene2805 , but their answers may not be applicable so I am asking here if they can also provide their expert advice here.

Also, which option should I select from the following in this scenario?

Not A Product Question

Anonymous_

Employee

I'm going to page @Mike9241 for this.

Mike9241

I don't understand. you say only property A is on the k-1. " Please note the K-1 I received is only for Property A". Yet it seems the 199A for all properties is reported on the k-1. this does not make sense. So where are the results for B C and D entered?

hardikgandhiAuthor

Thanks for your response. Let me see if I can clarify.

The K-1 in part I about the partnership's name and address calls out Property A. However, only section 199a refers to properties B, C & D below Property A(as I posted in my question). There is no mention of Properties B, C & D outside section 199a of the K-1.

Properties B, C & D were purchased using the sale of Property A. Section 199A, shows Rental income, W-2 wages, and the UBIA of qualified first for Property A and then followed by Property B, C & D. I reached out to the company through which I have invested, and their only suggestion was to add all the values up. But they said they couldn't give tax advice beyond that.

A1,A2, A3, B1, B2 ,B3 , C1,C2, C3 and D1,D2, D3 are actual values but I am calling it out as A1, A2... In this post do not show the actual property names ( since this is a public forum)

hardikgandhiAuthor

I didn't tag the original response in my last response. Tagging @Mike9241 . Mike, please see my response to your question earlier and see if you can help me.

Thanks,

Hardik