Discussion:Partnership Loss Calculation

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Discussion Forum Index --> Tax Questions --> Partnership Loss Calculation

Coinop (talk|edits) said:

27 May 2007
I have a K-1 that shows as follows:

Box 1: ordinary income, -648,117 Box 5: Interest income, +259,806 6a: ordinary divs, +86,614 6b: qual divs, +71,597 8: Net sh-term caps, -39,928 9a: Long term caps, +511,401.84 10: 1231 gain, +16,335 14(A):Self-Emp loss: -443,736 20(A):+346,421

Box N shows a tax basis of $401,895.03

My question is, the Box 1 loss is showing up in full on the return at line 17 via Schedule E. Given that the tax basis per the K-1 is only 401,895, can he deduct the whole Box 1 loss? I ask this in light of the significant income from Interest, divs, cap gains, etc (total AGI is 414,794 if full Box 1 loss is included) Thanks!

Solomon (talk|edits) said:

27 May 2007
Box N is the capital account which might not be the partner's outside basis. Do you have an actual ending basis for the previous year?

Coinop (talk|edits) said:

27 May 2007
Unfortunately no. The tax basis box is checked in Box N, for what it's worth. I guess my question is, what defines partnership loss? Is it ONLY the figure for ordinary business income in Box 1 that is subject to the basis and at-risk limitations, or is the other income (i.e., divs, cap gains and interest) also part of the calculation?

Solomon (talk|edits) said:

27 May 2007
The partner's share of taxable and non-taxable income is part of the calculation. Sec. 705.

Hadlin (talk|edits) said:

27 May 2007
also assumption of debt if this is a general partnership

Coinop (talk|edits) said:

27 May 2007
Okay, then to clarify. The term "partnership loss" is basically the result of k-1 losses subtracted from k-1 gains, and not just what goes in Box 1, ordinary income, correct?

Solomon (talk|edits) said:

27 May 2007
Yes - appears your software is doing it correctly.

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