Hi,
When entering K-1 data into TaxAct, where do you enter the distributions (line 19)? Most entries don't list the line number and none of the text descriptions match.
Is it possible to unlock the form? It would be easiest to copy from the paper form. There are other fields giving me trouble.
Thanks, Gary
Line 19 is a return of your seed capital. Say you bought shares for
10k in 2007, and line 19 is $100, and you sell in 2008 for 12k. Is your capital gain 12k-10k=2k? No, it is 12k-(10k-0.1k)=2.1k. Some tax software lets you enter the values for line 19 (but TaxAct does not), but it does not affect your 2007 tax return. You should keep track of line 19 for each year, perhaps in a spreadsheet, database, or such. I have not yet found software that does this, but am sure there are some.As for TaxAct, entering the K1 in their wizard and be difficult, especially if you have the free version. They have an option to get a form that looks just like the original K1, but I don't think it's in the online versions.
What other fields?
The short answer is that they don't enter into the computation of taxes until you dispose of your interest in the enterprise. They are subtracted from your basis, and thus will increase your capitol gains at that time.
John Beurket
This is not true if he receives distributions in excess of basis. Then there are tax consequences before disposition.
What basis would you use? Zero?
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