Question

In 2024 I sold my interest in a partnership and received a K-1 form indicating this. The sale was an installment sale. How can I link the installment sale to the K-1?

Forum|Forum|1 year ago
March 17, 2025
1 reply
0 views

I've entered both the K-1 details and created the installment sale in TurboTax but it doesn't seem to understand that they refer to the same sale.

D

DianeW777

No. It makes sense that TurboTax doesn't know they are the same sale. Also, the partnership and yourself should have an amortization schedule of payments with the breakdown for interest and principal for each year of the sale.

My advice is to remove the K-1, then just enter the installment sale. Keep in mind the rules for installment sales. Or if there are other income items on the K-1, just don't include the installment payment.

What is an installment sale? (for income tax purposes)
Form 6252 (review the required information for each year and contingent sales)

In some circumstances the selling price changes before the end of the final payment. This may not be the case with your sale.

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"

S

scott-gaschAuthor

Thanks for your response. The K-1 is showing the entire sale, not just the installment portion paid in 2024, as a distribution. Box 9a is showing a capital gain for the entire sale amount. Box 19a also shows the entire sale amount.

There is other information on the K-1, though. So, are you saying I should remove the K-1 lines related to the sale, add an Installment Sale (For 6252) for the sale, and keep the K-1 items unrelated to the sale?

There is a section in the TurboTax Installment Sale interview that purports to link the Installment Sale to an existing K-1 on the return which I did... but it seems to still double-count the capital gains.

PatriciaV

In general, when a partner sells their partnership interest, the sale is not reported on Schedule K-1 because the partner's interest was not an asset of the partnership.

For this reason, you should not enter Line 9a Long Term Capital Gain or Line 19 Code A Cash Distributions. Instead, report the sale and current payment under the Installment Sale topic.

Enter all other boxes, codes, and amounts from the Schedule K-1.

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"