# Capital Gains (USA tax return)



## debbie790 (Dec 28, 2010)

Hi,

I became a limited partner and a general partner in 2 separate corporations (in Nov-2017), and received a K-1 for 2017 and 2018. I am selling shareholding in both at a profit (capital gains) and transaction will complete by Feb-2019.

Questions:
1. Which slip will be issued to me for 2019 reflecting the sale and capital gains? I use TurboTax and can plug the values and see the tax liability.

2. Please recommend an accountant offering consultation with above and expat tax returns.

Thanks
Debbie


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## Bevdeforges (Nov 16, 2007)

If I understand your question correctly, you should receive a K-1 for any income or transactions that accrued to you in 2019 during the period from January 1st to the date that the sale of your partnership interest is finalized. You would include that information on your 1040s the same way you have done in the past.

The capital gains themselves would be included on a Schedule D, and if you do receive some form of 1099 on the capital gains, you'd file a form 8949 to reconcile what you put on the Schedule D with whatever the partnerships have reported as your capital gain on the 1099 forms.

But are you looking to file a regular 1040, or are you filing as a non-resident taxpayer? You show in your flags that you're from Canada and currently in the UAE. Are you a US citizen (and thus subject to filing as an "overseas taxpayer") or are you filing a 1040NR as a foreigner with US source income?


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## debbie790 (Dec 28, 2010)

Bevdeforges said:


> If I understand your question correctly, you should receive a K-1 for any income or transactions that accrued to you in 2019 during the period from January 1st to the date that the sale of your partnership interest is finalized. You would include that information on your 1040s the same way you have done in the past.
> 
> The capital gains themselves would be included on a Schedule D, and if you do receive some form of 1099 on the capital gains, you'd file a form 8949 to reconcile what you put on the Schedule D with whatever the partnerships have reported as your capital gain on the 1099 forms.
> 
> But are you looking to file a regular 1040, or are you filing as a non-resident taxpayer? You show in your flags that you're from Canada and currently in the UAE. Are you a US citizen (and thus subject to filing as an "overseas taxpayer") or are you filing a 1040NR as a foreigner with US source income?


I am a USA citizen residing in UAE. I have employment income from UAE and claim FEIE. Above-mentioned corporations are in USA, and I do have some losses from previous years, and not sure if they would offset the capital gains. I would like an expert to review my 2017-return and approximate my tax liability.

Also, I like to know which boxes of Schedule-D and 1099 will have the values (or a sample Schedule-D and 1099) for the capital gains, so I can plug them in TaxAct and review myself.


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## Bevdeforges (Nov 16, 2007)

There should be no shortage of US tax advisers in the UAE. There are also "expat" tax advisers available online. For sample documents, you should be able to find what you need on the IRS website (irs.gov). Depending on the amounts involved, you may want to look for one of the large international accounting firms to advise you, but very often their online sites have considerable information, including tax guides for overseas taxpayers, available to all.

The Schedule D is a schedule that you fill out. https://www.irs.gov/forms-pubs/about-schedule-d-form-1040 The instructions for the Schedule D should have a couple of examples for reporting.

With the change in the tax forms this year (for the tax changes voted last year by Congress), there may be a bit of a delay in getting the initial forms out to taxpayers. Add to that, this government shutdown (which does affect the IRS) and it may pay to wait a couple of weeks before you get started.


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## SoCal85 (Jan 14, 2019)

It looks like you sold an interest in a partnership since you received Schedule K-1s in the past. I agree - they will issue you a K-1 for your share of the income up until the date of sale. However, unless you are holding your partnership interest in some sort of brokerage account or something that tracks your basis you likely are not going to receive a statement showing your capital gain.

You or your tax accountant will likely need to compute the capital gain on the disposition of the partnership interest yourself. This will be your proceeds received less your adjusted basis in the partnership interest (original contribution + income recognized less losses recognized and less distributions received in the past). Assuming you didn't use your Sch. K-1 losses in the past to offset other income it should be carrying forward but it would depend on your facts. 

Also since you live outside of the US, make sure that the partnership is aware that you are a US person and not a foreign one. Under the new tax reform, the disposition of a partnership interest by a foreign person may require 10% withholding tax on the gross amount by the transferee now.


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## miky348 (Sep 23, 2010)

Hi,

1. As part of sale, I will be getting 100% of my contribution plus capital gains.

2. How to determine the cost of shares?
All shareholders contributed to purchase land (empty land), 80% of the land cost was financed by shareholders (including myself) and remaining 20% by loan (private lender). The land is still in the same condition, but I have decided to exit and sell all my shares (i.e. I get 100% of my contribution and capital gains). Also, it has been over 13 months since I contributed towards purchase of land.

This is the only asset the company owns and there has been some expenses (loan interest, bank fees, etc.), and no other activity since founding the company (i.e. no income).

3. I want to learn and understand how & where information will go and how tax/other calculations are done. I tried to find a CPA or tax consultant in upworkDOTcom for assistance, but not much luck. Please let me know if you can suggest individual/firm/forum.

Thanks.


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## Bevdeforges (Nov 16, 2007)

Um, Miky, are you the same person as Debbie?

But in any event, the K-1s should document the financial statements for the partnership over time. The final K-1 you receive will give you an idea of what your partnership shares are worth.

As far as an individual or firm who can do the necessary forms and calculations for you, it sort of depends on where you are located (Toronto and/or UAE) and how much you're willing to spend on the project. You could try and find an enrolled agent (someone specifically trained for tax preparation and issues) by using their professional society site: https://taxexperts.naea.org/

There are enrolled agents outside the US. You just have to play with the search page a bit to find them.


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