Skip to main content
Message Font: Serif | Sans-Serif
 
No. of Recommendations: 0
OSUMAG,

Wow! Thanks for taking the time to explain this. It's not what I expected. To make sure I understand I will use the numbers from my K-1 this year.

1. I assume the amount paid for shares and commissions are the contributions.

2. -658 (The ordinary business loss this year is big, -737)

3. Distributions -882

4. 7

5. I already included the loss on line 1 and all other items on lines 8 to 13 are gains, 23 total.

The partner's capital account analysis is as follows:

Beginning capital account 1,521
Capital contributed during year 0
Current year decrease -771
Distributions -882
Ending Capital account -132

If I follow your instructions, I end up with the ending capital account being -26 instead of -132. If I did this for all of the past 6 years I have owned this LP I would probably not have an ending capital account below 0. Why is your method of calculation different than the accountants from the LP. I assume that they don't disclose all the items that they use to get to their number of -771 for current year decrease, not including distributions.

I am puzzled by the concept of suspending items below 0. Other descriptions I read said that I needed to pay capital gains tax on that. However the point you are making is that I probably don't.

I plan to take this problem to an accountant this year, but I am not sure I can find one who thoroughly understands LPs

What are your thoughts on filing state tax returns. All my net ordinary income for all states are losses. Some show portfolio interest income (gain). A couple show investment interest expense and all show gross receipts as gains that are more than net ordinary losses. Since net income are losses, I assume that I don't need to file state tax forms. However I believe that some states, California for example, that ask for a filing, loss or gain.

Bruce
Print the post  

Announcements

Disclaimer:
In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.