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I have a family partnership that consists of a financial portfolio

and one piece of real...
I have a family partnership that consists of a financial portfolio and one piece of real estate which is the family's summer home. There are 5 family partners. We have filed a 1065, partnership return over the years and issued K-1's to each partner. The K-1's report investment income as well as a deduction for the mortgage interest and real estate taxes on the property. We do not take any deductions for utility costs, repairs etc related to the property.

Are we doing things correctly?
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Answered in 12 minutes by:
3/21/2013
Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 16,581
Experience: Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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Thanks for asking your question! I'm sorry to hear about your tax issue and I'm going to try my best to help you understand or resolve it.

Thank you for your question, and thanks for using JustAnswer.com. Yes, you are doing things correctly. You should not be taking deductions for utilities, repairs, etc unless you rent the property out when the family is not there.

The home would be considered the second homes for the partners, and therefore they would be eligible to take the interest deduction and real estate tax deduction on their federal returns.

Please let me know if you need anything additional. Thanks again for using JustAnswer.com and have a great day.

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You should be aware that your question, as with most tax questions, can never really be answered completely...addressing all the permutations; that is because of the many assumptions that have to be made I have done my best to determine what I think you are asking and answering it in the most direct and understandable manner possible. If, however, after reviewing the questions, you have any uncertainties or further questions, please do not hesitate to ask.

Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 16,581
Experience: Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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Customer reply replied 4 years ago


Thanks. As to the items that are not deductible I have split them 5 ways and reported them as distributions. I have also adjusted the partners capital accounts for increases in the portfolio value. This is the only way I can keep my balance sheet in balance. Is this correct?

Sounds correct to me, thanks...

** Please take a moment to rate my response as "Excellent" so that I may be compensated for assisting you today. Please let me know if my assistance was anything less than "OK Service", as I am compensated based on whether or not I have assisted you with your issue. If you need further clarifications, PLEASE WAIT TO RATE MY ANSWER UNTIL AFTER RECEIVING FOLLOW UP FROM ME. If I receive anything less than OK Service, I do not get paid. Thank you for your kind understanding in this matter. If you have difficulties rating, then simply respond stating that you are having difficulties rating and thank me for my excellent, good, or ok service and we can get the rating applied by the site. This answer is not to be construed as financial or legal advice. Please contact a local tax professional, and do not rely on this assessment to avoid penalties or to make financial decisions. This is for informational purposes only**
You should be aware that your question, as with most tax questions, can never really be answered completely...addressing all the permutations; that is because of the many assumptions that have to be made I have done my best to determine what I think you are asking and answering it in the most direct and understandable manner possible. If, however, after reviewing the questions, you have any uncertainties or further questions, please do not hesitate to ask.

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Customer reply replied 4 years ago

I have read the answer, thank you. since I had already rated you how do I get beyond this screen?

You do not need to do anything additional. Your positive rating was thanks enough.

Thanks again for using JustAnswer.com and have a great day.
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Thank you for the positive rating. I really enjoyed working with you – please feel free to request me again when you come back to ask another question. Simply enter "MyVirtualCPA" in the subject of your question, and it will be routed directly to me. Thank you again for using JustAnswer. For the quickest service, please post a new question.
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Megan C
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