MLP & Form 4797 not generated

Forum|Forum|4 years ago
October 10, 2021
1 reply
0 views

Hi,

This is my first year using TT. Prior to this year, a CPA did my taxes.
I own units in an MLP - oil & gas pipeline. I received a K-1 and entered all information into TT per the instructions. , In 2019, Form 4797 was generated and included an amount from Box 10 on the K-1 (loss).

This loss was added to the loss for my small business on Schedule C and the total entered on Line 7a (other income from Schedule 1) on my 2019 1040 SR.

But TT did not generate Form 4797 for 2020, yet I also have a loss in Box 10 on the 2020 K-1.
Can someone let me know - do I need Form 4797 and how do I get TT to generate it?

Concerned.

Thanks in advance.

Not A Product Question

Mike9241

Level 15

by definition with an MLP ordinary losses (lines 1 through 3) and 4797 losses are passive and can't be used to offset other income. if in 2019 there was ordinary income on lines 1 through 3, the 4797 loss up to the amounts on those other lines would be allowed (net effect zero). if both sets of lines showed losses, your CPA messed up. if in 2020 those lines are losses are all losses they are suspended until you either have enough income in future years to offset the losses or you dispose of the MLP.

Mitzy20Author

Level 5

I understand they are suspended - but why didnt the form generate?

Anonymous_

Level 15

I have owned shares in an MLP since 2007. I have to say honestly that I don't know whether this has been a good investment or not - it has appreciated in value and has thrown off income AND losses over the years, but I think I need to evaluate how this has impacted my bottom line from a tax perspective, because I don't know.

How are gains from the K-1 treated? Do they add to ordinary income? What about losses? From earlier in this thread there is discussion about losses going into
"purgatory" (i.e., accumulating) until such time as they can be used.

Can I only apply passive losses against passive gains from this MLP?

Thanks in Advance.

Yes, suspended passive losses from the MLP can be used to offset passive income but that is about it.

Otherwise, suspended passive losses are not released until you dispose of your interest in a taxable transaction (e.g., sell your interest).