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16510: 1040 - Distributions in Excess of Basis from 1065


1040 Individual Generally

Does Drake Tax automatically calculate the gain that results from a distribution in excess of basis from a partnership K1 reported on the 1040 return? 

 

No. Distributions entered in box 19 only flow to the Adjusted Basis worksheet, line 6. You must determine if a distribution was made in excess of basis and if it is taxable as a capital gain. The program does not automatically compute this gain, but note 216 is generated in view mode alerting you to the possible entry.

To calculate the capital gain, enter the required information on screen D

The amount of gain should also be entered on the K1P screen > Basis Wkst tab > line 2b - additional capital contribution and other current year increases. 

See Publication 541 and the Tax Information for Partnerships for details. 


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