ETP units (an MLP) were exchanged for ET units in 2018 (another MLP). How do I handle this transaction in Turbo Tax as the units were not sold but simply exchanged?

[nexchap]

This answer to a similar question should help:  https://ttlc.intuit.com/questions/4726806-how-to-merge-passive-losses-in-mlp-merger

[glebedin]

Hello @nexchap and thanks for the help in advance. I received two K1. One from ETP and one from ET (I have not sold in 2018). I read some of your posts but still a little confused. So far I understand that Im entering 2 separate K1 in TT. 

ETP - Should I ignore the USAC information on the supplemental information since I never owned it?

ET - Should I combine both ET and ETP on the supplemental information? And ignore USAC and SUN since I never owned them. 

Does the information in Part 2 Section L need to be entered for both K1

[nexchap]

Hi@glebedin:  Because you're a partner in ET, and ET holds stakes in 3 other partnerships (ETP, USAC, and SUN), you actually own all 4.  That's because the tax reporting "flows" to you.  So USAC reports its K-1 to ET, and ET turns around and reports it to you.  You have to file the info.

So for ETP, you can't ignore USAC.  And for ET, you can't ignore USAC or SUN.

You also can't combine these entities.  They're separate partnerships to the IRS, so losses from one can't be combined with income/losses from another.  Separate K-1s need to be filed

As to Part 2, Section L, that only applies to the "parent" partnership, and only needs to be entered there.

[glebedin]

Thanks for the quick reply. So Sounds like Im filing 6 different K1 from the 2 I received. 
2 for ETP and USAC

4 for ET ETP USAC SUN

Does that sound correct and also would ETP have 2 K1? One before the merger and one after?

Only two of them (ET and ETP) will utilize what is provided in Part 2 on their respective K1 

[glebedin]

One more note. The only K1 that gets marked as a Disposition was not via a sale is ETP on its original K1 and not the K1 from ET?

[glebedin]

Thanks for the quick reply @nexchap 

So Sounds like Im filing 6 different K1 from the 2 I received. 
2 for ETP and USAC

4 for ET ETP USAC SUN

Does that sound correct and also would ETP have 2 K1? One before the merger and one after?

Only two of them (ET and ETP) will utilize what is provided in Part 2 on their respective K1

If I held an mlp for 5 years, do I have to go back and look up all of the ordinary income distributions to adjust the cost basis or is that already provided on the current K1 sales schedule.

[nexchap]

@glebedin:  Just saw this.

Yes -- 6 K1s (possibly more if any of them have more than box 1 info). 

And yes -- 2 for ETP (before and after) this year.  You could actually combine them this year, but I've found it easier in TT to just leave them split for the current year.  But make a note for next year:  you'll only have the one from 2019 ET to enter, but you'll still have suspended losses from the 2018 pre-merger ETP.  So you'll make sure to add those to the suspended losses from the 2018 post-merger ETP when you enter that info into 2019, and everything will be wonderful.

And also yes -- disposition was not via a sale for the 2018 pre-merger ETP.  That leaves the suspended losses suspended, which is where they ought to be until you move them to the 2019 ETP next year.