I have a LLC
and am filling out my 1065 k-1 (partnership
) for a LLC member right now.
My member contributed $10,000 in capital to the partnership in fiscal year 2012; in fiscal year 2013 due to business losses, he was able to take $1,205.59 in losses, thereby reducing his capital account
to $8,794.41. We did not have any business activity after fiscal year 2013.
In fiscal year 2012, the LLC purchased a vehicle for business purposes for $10,000. We never reported depreciation
for the vehicle in our tax forms
In fiscal year 2015, the LLC sold the vehicle and received $16,843,59 in proceeds. This was distributed to the members -- the member received $5,614.53 per his distribution interest
My question is whether the capital account 2015 current year decrease (per Line L of Part 2 of the K-1) of $3,080.21 ($8,794.41-$5,614.53) is considered a net section 1231 loss on Part 3 line 10 of the K-1. Does any of it fall under Part 1 line 1 of the K-1 (ordinary business loss)?