Final K-1 and TurboTax

[Nick B.]

Do we have CPAs familiar with K-1 forms and TurboTax? 

I got a final K-1 from one of my investments (it sold in 2018) and don't know how to figure out my basis and sales price from the information provided on that and previous K-1s.

For starters, all but one of my previous K-1s (including 2018) show negative net rental income in the Box2 but I could not use that negative income as a write off because my income is over $150K.

My understanding is that I apply that loss to the final capital gain to reduce it. So, the question becomes how do I calculate that capital gain?

Should be an easy answer: cost basis - sales price = capital gain. But what is "cost basis" and what is "sales price" in this case?

Initially I thought that my basis is what I paid for my share of this investment but according to the IRS it's not that simple.

I need to adjust the basis up and down depending on income or loss for a given year. At the time of sale the basis becomes 0 as all capital is returned at that point. 

As for the sales price, there are two new boxes on the final K-1 that were previously empty:

• 9c (Unrecaptured section 1250 gain)
• 10 (Net section 1231 gain(loss)).

Nothing says "sales price" explicitly but I still need to calculate it somehow. Any ideas?

I looked at the previous years K-1s and summed up all income/loss from Box2 and all distributions from the Box19.

Then I found this equation to hold true: Sum(Box19) - Orig. Principal = Box10 + Sum(Box2) = Total Profit 

With that in mind, which logic should I use:

• Original principal is my basis and sum of all distributions is my sales price; or
• 0 is basis and sum of Box10 and INC (a negative number) is my sales price; or
• 0 is basis, Box10 is sales price, and previous years negative income is supposed to be added to Box10 by TurboTax; or
• something else ?

Where does Box9c fit into this picture? Does it represent depreciation that is supposed to be recaptured? But I did not write if off because of the passive loss limitation (0 in my case). Does it mean there is nothing to recapture?

Has anyone been in the similar situation and how did they handle it?

Thank you
Nick