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Old 01-11-2015, 11:50 PM
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Reporting Distributions

Hello Everyone,

First of all, thank you for taking the time to read my question.

I find myself a bit frustrated and overwhelmed. I have done my own taxes for many years now, using tax software. However, recently (in 2013) I started doing a few stock trades (involving partnerships) that gave me distributions (instead of the normal dividends), which then caused some Schedule K-1s (about 10 in all) to be generated. I tried to cover these in my tax program but it has turned out to be messy and convoluted.

From what I have read, if I have received distributions but the amount of those distributions is far less than what I paid to purchase the stock shares (the cost basis?), then I am not liable for any taxes on the distributions. Am I correct or am I wrong? Of course I am sure that I am still liable for any gains in the stock value itself when I sell the stock.

Can someone please clarify?

Thank you in advance for your help.

Josef



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Old 01-16-2015, 03:30 AM
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From what I have read, if I have received distributions but the amount of those distributions is far less than what I paid to purchase the stock shares (the cost basis?), then I am not liable for any taxes on the distributions. Am I correct or am I wrong? ========>>>>>>> CORRECT AS PART OF YOUR RETURN OF INVESTMENT/CAPITAL.Your adjusted basis in the partnership interest is decreased but not below 0 by the money and adjusted basis of property distributed to you , as a partner.in general, A partnership generally does not recognize any gain or loss because of distributions it makes to partners.so, certain types of distributions / any distributions that exceed your basis may result in gains /losses that must be reported for the year in which they occur.

Of course I am sure that I am still liable for any gains in the stock value itself when I sell the stock.=======>>>>>>>>> Tax basis is the amount upon which taxable gain or loss, if any, will be calculated on the occurrence of various events;basically, the basis of a partnership interest is the money plus the adjusted basis of any property you contributed.there are 2 types of tax bases concerning partnerships. The inside basis is the partnership's tax basis in the individual assets thatis the same as the contributing person’s basis in the asset.The outside basis is the tax basis of each individual partner's interest in the partnership. Whenyou contribute property to the partnership, your basis in the contributed property is equal to its FMV. However, the outside basis increases only by the amount of the basis that you had in the property.for example, If you must recognize gain as a result of the contribution, this gain is included in the basis of your interest. Any increase in your individual liabilities because of an assumption of partnership liabilities is considered a contribution of money to the partnership by you.



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Old 01-18-2015, 04:33 AM
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Wnhough,

Thank you for your reply. Your comments make the picture clearer, since the handling of the Schedule K-1s has been a bit of a pain for me. I think I can more easily proceed with the processing of my return.

Again, many thanks.



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Old 01-18-2015, 04:56 AM
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Quote:
Originally Posted by newtgmember2759 View Post
Wnhough,

Thank you for your reply. Your comments make the picture clearer, since the handling of the Schedule K-1s has been a bit of a pain for me. I think I can more easily proceed with the processing of my return.

Again, many thanks.
A partner generally recognizes gain on a partnership distribution only to the extent any money / marketable securities treated as money included in the distribution exceeds the adjusted basis of the partner's interest in the partnership. Any gain recognized is generally treated as capital gain from the sale of the partnership interest on the date of the distribution. If partnership property /other than marketable securities treated as money/ is distributed to a partner, a partner generally does not recognize any gain until the sale or other disposition of the property



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