Schedule E, page 2, column (k) shows nonpassive income of $135,460.  The Form 1065 Schedule K-1 shows two types of distributions on line 19.  One distribution is shown in the amount of $75,000 with the letter “A” in front of it.  The second distribution is in the amount of $20,000 and has the letter “C” in front of it.  Total distributions shown on the fifth line of Section L of the Form 1065 Schedule K-1 show the sum of both distributions or $95,000.  The senior credit officer says that $95,000 is the amount of actual cash received by the partner.  Is this correct?

No, the actual cash flow received by the partner is the $75,000 shown as labeled by the letter “A.”  Only distributions on line 19 with a letter “A” preceding are cash distributions.  Other distributions with either a letter “B” or “C” preceding them are noncash distributions and should not be counted as cash flow to the partner.