Drake Tax - 1040 - Distributions in Excess of Basis from 1065

Article #: 16510

Last Updated: August 27, 2025

 

Tags: Drake TaxK1

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A distribution reported on screen K1P, box 19 flows to the Wks K1P Detail Adj Basis, line 6. If the amount is greater than the total basis shown on line 5, the difference is reported on Form 8949 and Schedule D.

Note  For tax purposes, a decrease in a partner’s share of partnership liability (debt) is treated the same as a cash distribution by the partnership as discussed above.

Review Form 8949, Part II. Box F is checked and the description shows as Excess Distribution with the name and EIN of the partnership listed:

Image of Form 8949 showing excess distribution.

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

In prior years, the gain is not automatically computed (see note 216). Manual entries on screen D and the basis worksheet screen were required.