Liquidating distribution partnership basis
However, since it then is recourse to you based on what you have said, it then is added to your basis; effectively netting to zero.However, if this debt is now being assumed by you, and only you, then this is technically a contribution to the partnership.
Turbotax Business shows the property as a net section 1231 loss on each of the 3 partners K1's, although the full basis, adjusted for depreciation, should transfer to me for recording on my 1040.For tax purposes, each partner, except me, has absorbed losses exceeding their investments in prior years.Partnership tax is difficult and liquidating a partnership with property distributions can be even more complicated.In general, you will not recognize a loss on a liquidating distribution UNLESS the distribution consists of ONLY cash, inventory and unrealized receivables (know as hot assets).Distributions of property, other than what was noted above, will take a "substituted basis".Net asset value of about k (cost of house minus accumulated depreciation) was allocated accordingly to each partner on the K1s. If so, does that mean that the new basis for me to reflect the asset on my 2016 individual tax return is my share of the k? A disposal means you either sold them or "pitched them" either of which will trigger Section 1231 (and maybe Section 1245).I guess I'm getting confused by the 1231 loss versus the basis that get's transferred to me on my 2016 individual tax return. In either case, you do not want to reflect disposal.Indeed, I selected "disposed of by some other means" in turbotax.That then triggered the Section 1231 loss allocation to all partners.However, I do not think there is any kind of trick here.If a partner receives a liquidating distribution then he is liquidated and no longer a partner.