I have received a final k-1 and lost my entire investment

Forum|Forum|1 year ago
March 29, 2025
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The initial investment ($12,500) in the real estate partnership was in 2008. It has done poorly since the get go. I have had negative real estate income each year until 2023 when I had a net section 1231 loss of $-15,522 and other income of $10,274. My beginning/ending capital account in section L was $7,501 and $794, respectively. This year I received a final k-1 with -$794 in rental income. I want to take advantage of the collective loss now that it is "dissolved". Can someone walk me through that? Thanks so much in advance.

Best answer by PatriciaV

If you have any passive losses from prior years carried over to this year, reporting the end of the investment will release those losses to be used on your current year return. The losses each year reduced your basis, eventually to zero. Current year losses will be included as well.

PatriciaVAnswer

Employee

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lgal63Author

Thanks so much Patricia. You answered my question twice as I posed it in two different ways (didn't think one question was uploaded!). I am clear on what to do now, but on TT in the review process of my federal return, another issue related to the same investment has popped up that TT says I need to fix before I can file. TT says "I have a QBI suspended loss (of -$1,413) should not have a value when no previously disallowed losses are present for regular tax purposes." The dollar amount is the net rental income (box 2) that I received on my k-1 back in 2022. From looking back on my passive carry forward losses which now total -$8,121 (and haven't been utilized prior to now), I know that the -$1,413 is already included in that number. It is possible I mislabeled that amount back in 2022 as QBI and that is what is causing the glitch? Regardless, should I just zero out that entry given the -$8,121 already includes it? Hope this makes sense. Thanks again for the concise and speedy reply. All the best.

PatriciaV

Employee

Yes, enter zero for this Smart Check message. The actual carryover (if any) appears on another section of the worksheet, so the information should carry over to next year.

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