I have a Final K-1 for an LLC dissolved in 2013 with a positive Ending Capital Account.
I was a passive partner and no distribution was made to me.
I understand some partners had negative Ending Capital Account. I was also told during dissolution that the LLC was worthless.
One CPA says this is an Ordinary Loss and reported in Schedule E. The CPA who prepared the K-1 says it is my new basis and said the positive amount is a Capital Loss which makes no sense.
The amount invested was $11,633 and the Ending Capital Account is now $10,218.
I'm using Turbo Tax and the software is not useful at all.
Can someone assist?
1. If I have a positive account does the LLC owe me money? According to RUPA Section 807(b), a partner is entitled to a distribution equal to his positive capital account balance upon dissolution of the partnership.
2. Where do I enter the final Ending Capital Account $10,218?
3. If the new basis is $10,218 is negative gain zero?