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Posted by Arthur Kamlet on April 21, 2008, 2:58 pm
Please log in for more thread options >removeps-groups@yahoo.com wrote:
>> On Apr 19, 1:26 pm, hid...@hidden.com (Art) wrote:
>>
>>> Each PTP's annual K-1 sent to shareholders shows a Partner's Capital
>>> Account Analysis in Box L. But the IRS instructions for K-1/1065 warn
>>> that Box L "cannot be used to figure your basis." Anyhow, some of
>>> those Box L bottom lines are already in negative numbers, which the
>>> instructions tell you not to use.
>>
>> How about box 19 (Distributions), codes A and B?
>>
>>> On p. 2 of the IRS instructions, there's a "Worksheet for Adjusting
>>> the Basis of a Partner's Interest in the Partnership" but it requires
>>> some expert understanding of the K-1 entries and how they interrelate,
>>> from year to year.
>>
>> Sorry, I haven't used this worksheet before. It's quite long, whereas
>> adding line 19 over all the years seems easier. Maybe the worksheet
>> is more thorough.
>>
>
>For my PTP, I added up all of the line 19 distributions from the
>beginning and they add up to more then the original cost for the first
>time this year (2008) and I will have to address this issue for 2008.
>
>Assuming that all of these distributions are "Return of Capital" (which
>is probably not 100% true), how does one report this as income? Is this
>considered a capital gain and reported on Sched D or is it other income
>and reported on 1040, line 21 or does it go somewhere else?
>
>The issue remains that we (the OP and I ) don't know how to calculate
>how much of the distribution is "Return of Capital" and how much is
>something else. Apparently the data in Box L, does not give you the true
> value of "Return of Capital"
Your capital is what you put in after reduction by other distributions,
plus what you earned and retained, such as interest and dividends paid
to you, less losses you recognized that came to you on a K-1.
It is unusual for your capital account to actually go negative.
--
ArtKamlet at a o l dot c o m Columbus OH K2PZH
--
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