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Financial Planning / Tax Strategies
|Subject: Re: K1 Reporting||Date: 4/5/2005 10:40 AM|
|Author: irasmilo||Number: 78308 of 122845|
Thanks for reply. I have similar thoughts but if my recall correct past limited partnerships reported with the K1 the return of capital. I repeat I am not sure of regulations but when a LP is liquidated the money received for the units (liquidation funds) does not necessarily represent a purchase price as it may include some other charges for depreciation, etc. This LP called a tax shelter did not do any sheltering for me and now I may even incur a small capital gain. This LP gave no instructions how to handle the amount of money given to purchase the units held & thus liquidate the partnership.
To be absolutely safe reporting the amount given on schedule D would be proper even though it will incur a tax payment. Oh well a capital gain better than a loss.
Thanks again for your observation.
The cash you receive upon liquidation is reported on Schedule D, but you can't know whether it's a gain or a loss until you know your cost basis and include that on Schedule D as well. Your cost basis is your initial purchase cost plus/minus all of the income/expense items and cash distributions reported over the years you've owned the LP.
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