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I'm doing the 1065 and schedule K for the investment club, and have a question. We had cash distributions in 2011 that were return of capital, and so there is no tax due on that. It looks like I just put that on Line 19A of the Schedule K, and that will translate to a code A on Line 19 of the partner's K-1. Is that all I do here? How does the IRS know that this is a return of capital and not a gain?

I have the capital gains reported separately already, but I'm feeling like I am missing something in terms of reporting.
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