Dispose of interests in partnerships or S corporations when section 1411(c)(4)(A) applies
For the disposition of an active interest in a partnership or S corporation as described in section 1411(c)(4)(A), the gain or loss is taken into account for net investment income only to the extent of the net gain that would be taken into account if all the property of the partnership or S corporation was sold for fair market value immediately before the disposition of the interest, per Regulations section 1.1411-7.
Enter a current-year disposition of a partnership interest or S corporation stock
- Select theIncomefolder, then theB&Dtab.
- Open theSchedule for detailstatement window.
- SelectBusinessin the Type column, then an option in the Form column and the Unit column.
Enter a current-year installment sale
- Select theK1folder, then theK1Salescreen.
note
By default, UltraTax CS excludes from net investment income all gain or loss related with an activity to which net investment income tax doesn't apply.
Enter a disposition of interest in the partnership or S corporation
- Select theTaxesfolder, then theACA Taxtab.
- Enter the disposition details in theAdjustment from disposition of partnership interest or S corporation stockstatement window.
- UltraTax CS includes this information in the statement for Form 8960. The gain or loss displays as an excluded item in the Form 8960 – Net Investment Income Worksheet 1, Form 8960, Line 5b, Net gain or loss from disposition of property not subject to net investment income tax. It's also included as a disposition of interest.
- UltraTax CS then creates the Form 8960, Line 5c, Adjustment from disposition of partnership interest or S corporation stock worksheet on Form 8960 – Net Investment Income Worksheet 2, and enters the adjustment amount on Form 8960 line 5c.
note
By default, UltraTax CS includes all gain on installment sales from the
InstPY
screen in the PerSale
folder in net investment income. If an installment sale represents a prior-year disposition of an active interest in a partnership or S corporation, you may need to adjust the gain by the application of Regulations section 1.1411-7. Enter the details of the disposition in the statement window for Adjustment from disposition of partnership interest or S corporation stock
on the ACA Tax
screen. Indicate that it refers to an installment sale by entering the year in the Installment Sale First Reported column. UltraTax CS then creates the Form 8960, line 5c, Adjustment from disposition of partnership interest or S corporation stock worksheet on Form 8960 – Net Investment Income Worksheet 2, and enter the adjustment amount on Form 8960 line 5c.
