Schedule O (Partnership): Complete Liquidation (2024)

Who files this form

The supplied 2024 form is labeled Schedule L, Complete Liquidation, not Schedule O.

A partnership can complete this schedule only if it answers 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?

If all three answers are yes, enter the applicable dates for stopping business activities and distributing assets. Complete this schedule before completing Form NJ-1065.

What you'll need

Have the following forms and information available to complete the schedule:

• The partnership name as shown on Form NJ-1065 and its federal EIN.
• The dates business activities ended and all assets were distributed to partners.
• Federal Schedule K amounts for the income categories on lines 1 through 11.
• Amounts from selling or disposing of partnership assets as part of the complete liquidation, and any related net additions or subtractions.
• Schedule NJ-NR-A, line 8, for the allocation factor used to calculate New Jersey-source amounts.
• Form NJ-1065 and its instructions for lines 1 through 11, line 13b, “Other Additions,” and line 15e, “Other Subtractions.”

How to file

The supplied text explains how to complete the schedule and transfer its results to Form NJ-1065. It does not provide mailing or e-filing directions or a filing address.

Complete the schedule before Form NJ-1065:

1. Column A: Follow the NJ-1065 instructions for lines 1 through 11.
2. Column B: On lines 8, 9, and 10, enter the portion of column A attributable to selling or disposing of the partnership’s assets in a complete liquidation. Exclude amounts derived from other partnerships.
3. Column C: On those same lines, enter related net additions or subtractions. Refer to the NJ-1065 instructions for lines 13b and 15e.
4. Column D: Add columns B and C on lines 8, 9, and 10.
5. Column E: Multiply each column D amount by the allocation factor from Schedule NJ-NR-A, line 8.
6. Column F: For each line 1 through 11, subtract column B from column A. Enter the result in column F and on the corresponding line on the front of Form NJ-1065.
7. Line 12: Total lines 8, 9, and 10 separately for columns D and E. Transfer those totals to Form NJ-1065, line 24, columns A and B, respectively.

Common mistakes

• Completing the schedule without three yes answers. The form allows completion only if all three eligibility questions are answered yes.
• Leaving the applicable dates blank. If all three answers are yes, the dates must be entered.
• Including amounts from other partnerships in column B. The form specifically says not to include them.
• Completing Form NJ-1065 first. The schedule says to complete it before Form NJ-1065.

Questions people ask

Can the partnership complete this schedule if one answer is no?

No. The partnership must answer yes to all three eligibility questions.

Does column B include liquidation amounts from other partnerships?

No. Column B must not include amounts derived from other partnerships.

How are New Jersey-source gains or losses calculated?

For lines 8, 9, and 10, multiply the amount in column D by the allocation factor from Schedule NJ-NR-A, line 8. Enter the result in column E.

Where do the line 12 totals go?

Carry the column D total to Form NJ-1065, line 24, column A. Carry the column E total to line 24, column B.

Official sources

• https://www.nj.gov/treasury/taxation/pdf/partnership/2024/schedl.pdf