COD income on final K-1 goes on 8582?

Technical topics regarding tax preparation.
#1
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Taxpayer is a passive partner in partnership Alpha. Taxpayer enters the year with carry forward basis losses of $50 from partnership Alpha along with $100 of suspended passive from other business interests. In 2017 taxpayer receives a final K-1 from Alpha reporting $10 of ordinary income and $100 of cancellation of debt income (CODI). My initial research, based on rev proc 92-92, was that the cancellation of debt income goes on the 8582 which would free other passive losses. However, I came across this presentation (https://www.wkblaw.com/wp-content/uploa ... Issues.pdf) which indicates, on page #23, that due to section 469(g) with this being the year the entire partnership interest is disposed the CODI doesn't belong on the 8582: "Even if CODI income and/or gain on foreclosure or sale of property is determined to be passive, it does not belong on Form 8582, triggering unrelated passive losses, if current and suspended losses from the activity disposed of exceed income/gain reported from the activity. (See IRC § 469(g).)". Opinions?
 

#2
Nilodop  
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if current and suspended losses from the activity disposed of exceed income/gain reported from the activity.
. From your facts, you don't seem to have this situation.
 

#3
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I oversimplified my scenario in the initial post. Taxpayer also had a reduction in his share of Alpha's liabilities of $40. His capital loss on the disposition of his partnership interest was $0 beginning basis + $110 current year income - $50 carry forward loss - $40 change in partner's share of liabilities = $20 capital loss which was offset by other capital gains.

For this activity on his 8582 I have +$10 current year ordinary income +$100 CODI - $50 carryforward loss - $20 capital loss on the disposition of the partnership interest which nets to +$40 for the activity and is therefore allowing $40 of passive losses from his other passive activities.

The presentation that I linked to is making me second guess having the CODI on the 8582.
 

#4
Nilodop  
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FORM 8582: Dispositions with Net Losses
If there is an overall net loss on disposition of a passive activity (after considering all current and suspended losses), none of the gains or losses should be entered on Form 8582. Gains and losses from the sale should be reported on Schedule D and/or Form 4797. Current and carryover losses should be reported on Schedule E in the non-passive column with a note to the left “Entire Disposition of Passive Activity”.
The purpose of Form 8582 is to compute the allowable passive losses. If the disposition of the passive activity is a qualifying disposition as previously discussed, the losses attributable to that activity are allowed in full, and, as such, would not be required to be reflected on Form 8582.
5-4
. https://www.irs.gov/pub/irs-mssp/pal.pdf

BTW, that's Rev Rul 92-92, not Rev Proc.
 


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