"Jeff" <jeff.h[at]bigfoot.com> wrote:

- quote -

Mark the "old" investment as a complete disposition of a
passive activity. Make sure to include the ordinary income
recapture and the proper statements regarding disposition in
the return (hopefully the K-1 and supplemental materials
identify this). The "new" K-1 should show a capital
contribution equal to the distribution in the "old" K-1
(less distributions earlier in the year).

--
Tom Healy, CPA
Boulder, CO
Web: http://www.tomhealycpa.com

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I'm stumped.

Client bought shares of a Star Gas publicly traded limited
partnership. The partnership had a "technical termination"
because of turnover of shares in November, so he got two
K-1s. 1/1-11/30 shows a loss, the one for December shows a
gain. Instructions say to treat as two separate investments,
so I entered that way. It looks like the passive loss in
unallowable and the gain is taxable.

Logical; BUT the "old" partnership really terminated on
11/30, so shouldt I terminate that investment and take the
loss? Or do I roll the whole deferred unallowable losses
into the new investment, thereby offsetting the taxability
of the new income?

In addition to the tax question, if someone has an answer,
do you know how I get that answer into Lacerte?

Thanks

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