Question

How to input amount from K-1, Line 17, Code ZZ if it needs to go to Schedule D, Form 8949- what type of 1099 should it be entered as?

Forum|Forum|2 years ago
April 6, 2024
1 reply
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Hello,

First time having this happen but I have an amount in my K-1, Line 17, Code ZZ from "Gain from Excessive Distribution". I've worked through TurboTax and found that the amount will need to go into Schedule D, Form 8949. What I'm now having trouble with is what type of 1099 should it be entered as? Because the "payer" would be my company and I obviously didn't get a 1099 form distributed from my company. Any thoughts from anyone who has gone through this before would be fantastic. Thank you very much!

TurboTax Business Windows

PatriciaV

Yes, if you received a distribution that was more than your adjusted basis, you have taxable income. In most cases, this is a long-term capital gain, which is reported on Schedule D (as a sale with no basis).

To enter this, open your return and search on "investment sales," then use the jump-to link to go to the start of this section. If you have other sales enter, click on "Add another sale" at the bottom of the list.

Choose "Other" and follow the prompts to enter a description (ie: Distribution in Excess of Basis), the amount and the date you received the distribution. Continue to enter a Cost Basis of zero (because you have no remaining basis) and the date you first invested in the company. TurboTax will show a summary page that shows how this will be reported on your return.

See IRS Pub 541 Partnership Distributions and Partnership Adjusted Basis

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