Schedule L: Complete Liquidation (2025)
New Jersey · NJ Division of Taxation · Used for tax years 2025
New Jersey Schedule L reports partnership income and gains or losses from disposing of assets in a complete liquidation, including amounts sourced to New Jersey. It separates liquidation-related gains or losses from other partnership income and is completed before Form NJ-1065.
Who files this form
For tax year 2025, Schedule L covers complete liquidation of a partnership. You can complete it only if you answer yes to all three questions:
- Have the partnership and all its partners discontinued all business activities this year?
- Have all partnership assets been distributed to the partners this year?
- Are the partners required to recognize gain or loss on the disposition of their partnership interests for federal income tax purposes this tax year?
Enter the applicable dates for stopping business activities and distributing all assets. Complete Schedule L before completing Form NJ-1065.
What you'll need
Have these forms and information available:
- Federal Schedule K: The partnership’s reported income amounts are used in column A.
- Form NJ-1065 and its line-by-line instructions: Schedule L refers to the instructions for lines 1–11, line 13b, “Other Additions,” and line 15e, “Other Subtractions.”
- Schedule NJ-NR-A, line 8: Its allocation factor is used to calculate New Jersey-source amounts in column E.
- Liquidation information: Amounts from the sale or disposition of partnership assets, related additions or subtractions, and the dates business activities stopped and all assets were distributed.
Common mistakes
- Completing Schedule L without three “yes” answers. The schedule can only be completed if the partnership answers yes to all three eligibility questions.
- Leaving the applicable dates blank. If all three answers are yes, the dates must be entered.
- Completing Form NJ-1065 first. The form says to complete Schedule L before Form NJ-1065.
- Including amounts from other partnerships in column B. The form specifically says not to include those amounts.
Questions people ask
What belongs in column B?
Enter the portion of column A amounts on lines 8, 9, and 10 that relates to selling or disposing of the partnership’s assets as part of a complete liquidation. Do not include amounts derived from other partnerships.
How do I calculate columns D and E?
For lines 8, 9, and 10, add columns B and C to get column D. Multiply each column D amount by the allocation factor from Schedule NJ-NR-A, line 8, to get the New Jersey-source amount in column E.
What goes in column F?
For each line 1–11, subtract column B from column A. Enter the difference in column F and on the corresponding line on the front of Form NJ-1065.
Where do the line 12 totals go?
Add lines 8, 9, and 10 separately in columns D and E, and enter each total on line 12. Carry the column D total to Form NJ-1065, line 24, column A, and the column E total to line 24, column B.