bobcvn, I have same question. Hope someone can answer:
I am equally confused on the additional page Energy Transfer
(ET) included in the Tax Package for the ETP to ET transfer. It is
titled "Built In Gain/Built In (Loss) Statement." It
states "On October 19th, 2018 you contributed your ETP units to Energy Transfer
LP ("ET") in exchange for ET common units. An asset
contribution to a partnership would result in a built in gain or (loss) to be
recognized by the partner as the units are disposed. The tax basis
reported below is based on information provided to the Partnership by you or
your broker, or the amount used to determine your share of allocable gain or
loss."..."This statement is provided by the Partnership to report the
built in gain or built in (loss) generated by an investor's exchange of
property for ET units."
Gives 3 entries: "Fair value of contributed ETP Units" and "Tax Basis of Contributed ETP Units" and "Built in Gain/Loss".
My question: Is this reportable on 2018 taxes or is this to be used when sold in future?
This area of partnership tax is complicated and I am sure that the preparer of the tax return is a Big 4 Firm that has done this a time or two (or is at least reviewing the return).
Having said that, individuals make mistakes.
However, you are not comparing apples and apples between the two K-1's. When the "built-in gain" box is checked on a K-1, this is determined based on FMV at the date of contribution (where FMV is greater than adjusted tax basis) which will not agree with the "old" K-1 books and records. Essentially the assets were booked up as a result of this event. The preparer of the tax return will handle any Section 704(c) implications from this book up event and will run those through the "new" K-1 on line 1 (or appropriate line).