2005 1065 K-1 Line 19 code B
From TaxAlmanac
Code B shows the partnership’s adjusted basis of property other than money immediately before the property was distributed to you. In addition, the partnership should report the adjusted basis and FMV of each property distributed. Decrease the adjusted basis of your interest in the partnership by the amount of your basis in the distributed property. Your basis in the distributed property (other than in liquidation of your interest) is the smaller of:
• The partnership’s adjusted basis immediately before the distribution or • The adjusted basis of your partnership interest reduced by any cash distributed in the same transaction. If you received the property in liquidation of your interest, your basis in the distributed property is equal to the adjusted basis of your partnership interest reduced by any cash distributed in the same transaction.
If you contributed appreciated property to the partnership within 5 years of a distribution of other property to you, and the FMV of the other property exceeded the adjusted basis of your partnership interest immediately before the distribution (reduced by any cash received in the distribution), you may have to recognize gain on the appreciated property. For property contributed after June 8, 1997, the 5-year period is generally extended to 7 years. See section 737 for details.
If you receive cash or property in exchange for any part of a partnership interest, the amount of the distribution attributable to your share of the partnership’s unrealized receivable or inventory items result in ordinary income (see Regulations section 1.751-1(a) and Sale or Exchange of Partnership Interest on page 1).
