Originally Posted by jnix
My final K-1 from a limited partnership shows an ending capital account balance of $20,000. My understanding is that that is a long term capital loss. My question is where do I enter it onto the tax return?
in a LP, each limited partner has a separate capital account for their allocated investment and distribution of profits; the partnership must provide a K-1 form to all its partners outlining the partner's year end capital investment, any distributions or losses and remaining capital balances. Capital account of each partner represents his equity in the partnership. The beginning capital account, withdrawals and distributions, and ending capital account balance amounts are needed to calculate your basis in the LP. The amount of $20k loss will not have an effect on your individual's return as long as the partnership is not passive income to you and as long as you are a partner in the partnership. The basis amount will be helpful in calculating the gain/loss in case you decide to sell your partnership share.