Calculating Realized Gain for partner withdrawing an amount greater than tax basis
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Calculating Realized Gain for partner withdrawing an amount greater than tax basis One of our partners would like to make a withdrawal that is greater than his tax basis. How is the realized capital gain determined on the amount that is withdrawn after the tax basis is depleted? Thanks, sb The difference between the withdrawal amount and his tax basis is capital gain. However, for this purpose, you use his tax basis at the end of the year, not his tax basis "today". You can provide a tentative withdrawal report now, but you must regenerate the withdrawal report at the end of the year to include any subsequent contributions he makes and any income/expense/gain/loss allocated to him. The nature of any capital gain (long term or short term) is measured from the date of his entry into the club. Ira Smilovitz, EA One of our partners would like to make a withdrawal that is |
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