cancel
Showing results for 
Search instead for 
Did you mean: 
Level 1

What is the 'build-in gain/loss impact of Energy Transfer LP (ET) acquiring Energy Transfer Partners LP (ETP) to individual shareholders?

The built in Gail/Loss will have an impact when shares are sold.  No impact on the 2018 return unless shares were sold between October 19th and December 31st.
Level 4

What is the 'build-in gain/loss impact of Energy Transfer LP (ET) acquiring Energy Transfer Partners LP (ETP) to individual shareholders?

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?


Level 1

What is the 'build-in gain/loss impact of Energy Transfer LP (ET) acquiring Energy Transfer Partners LP (ETP) to individual shareholders?

I have the same question.  I do not see the answer,  has anyone replied?
Level 4

What is the 'build-in gain/loss impact of Energy Transfer LP (ET) acquiring Energy Transfer Partners LP (ETP) to individual shareholders?

Got an answer from Energy Transfer Partners:
"The built in gain schedule in the ET tax package is informational only.  If you look on the K-1 itself, you'll see a Box "M" that asks whether or not property with a built in gain or loss was contributed the the partnership during the year.  For all of the legacy ETP partners that held through the ETE/ETP transaction, the form of the transaction was a contribution into ETE by all of the public ETP partners of their ETP units (i.e. property and not cash) in exchange for ETE/ET units.  Since virtually every ETP partner would have had a difference in the value of their respective ETP units versus their adjusted tax basis, virtually every partner is deemed to have contributed property (i.e. ETP units) with a built in gain or loss (i.e. the difference in the FV of the ETP units immediately before the transaction and the adjusted tax basis of the units).  If Box "M" on the K-1 is checked "Yes" (which it should be for virtually every former ETP partner that participated in the ETE/ETP transaction), we are required to attach an informational statement to the K-1".
Level 1

What is the 'build-in gain/loss impact of Energy Transfer LP (ET) acquiring Energy Transfer Partners LP (ETP) to individual shareholders?

In case you were wondering, the amounts reported as the built in gain are based on the fair value of ET units received on the merger date (10/18/2018) -- approx $17.05/unit -- less your closing ETP partner  capital account balance "withdrawal" (subtract any Box 19 distributions included in this amount) per Part II, section L on your K-1.  This ETP withdrawal amount/ending ETP capital account is your adjusted basis in your new ET units.  Continue reporting all ETP K-1 items using the separate schedule provided by ETP and ET in 2018, and ET in future years.  All ETP Suspended losses will be recognized when you sell your ET units.
Level 4

What is the 'build-in gain/loss impact of Energy Transfer LP (ET) acquiring Energy Transfer Partners LP (ETP) to individual shareholders?

Thanks for the additional information.
Level 1

What is the 'build-in gain/loss impact of Energy Transfer LP (ET) acquiring Energy Transfer Partners LP (ETP) to individual shareholders?

I'm currently working on a tax return for a client that has this same K-1 that everyone else has commented on.  I just noticed that the "adjusted tax basis" on the Built in Gain (BIG) statement provided by the partnership is incorrect.  On the Final K-1 that I have from ETP, the "withdrawal & distributions" amount in Section L is less.  The difference is the amount in Box 19A from the ETP's Final K-1, which is a partner distribution.  This partner distribution is being taxed as a long-term capital gain on "excess distributions" because my client has no "basis" remaining in the ETP shares.  This capital gain should not be included in the BIG amount if my client is already being taxed on this money on his 2018 return.  Has anyone else noticed this?
Highlighted
Level 9

What is the 'build-in gain/loss impact of Energy Transfer LP (ET) acquiring Energy Transfer Partners LP (ETP) to individual shareholders?

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).