Received 2 k1's for same PTP held in joint account. PTP ended in 2018. One has sales schedule, other does not. How do I correctly enter everthing and carryover losses?

[aws316]

Enbridge MLP, EEP, ended on 12-20-2018. Our units were held in a joint account at one brokerage with my wife's name listed first with her ssn on the statements. On 7-30-2018, we transferred the whole account to a new brokerage, and for some reason my name is now listed first with my ssn on the statements. We received 2 k-1 statements from EEP. One with her name listed 1st and one with mine 1st. The one with my name 1st has a sales schedule, her's does not. It seems that when we changed brokerages, they switched the registration around, and now on her k1, under the ownership schedule, it shows the units were transferred out, and on the k1 with my name 1st, it shows the units were transferred in. So, on the k1 with her name 1st, since there is no sales schedule on hers, how do I show the PTP ended? "Complete disposition thru sale" or "disposition was not thru sale"?

If I select "disposition not thru sale", the suspended losses stay suspended. Do I manually carry those losses over to the worksheet for my k1?

Another question is, are the figures on the sales schedule (adjustments to basis, and ordinary gain amount) only pertaining to the amounts that were accumulated since 7-30-2018 (when it was transferred to my name first) or since the original purchase of the units on 1-3-2017? It does show the acquisition date as 7-30-2018. If that's the case, I feel this may be an error, as I would need the numbers for the entire ownership period!

My broker and  the k1 support people for EEP were unable to answer these questions. So I thought I'd run it by you guys before I talked to a local tax advisor.

Thanks for your time,

Andrew

[nexchap · Accepted solution]

My thoughts follow.  However, I'd suggest running it by a tax advisor just to be sure that the change in SSN isn't some sort of problem:

- K-1s are issued for each account that has an ownership in the MLP for any length of time.  Since you had two accounts, you get two K-1s.  This would be the case whether they were under the same SSN too.

- The numbers on the K-1s are specific to the time period the account was open.  So the first K-1 (your wife as primary) shows the MLP's reported values from 1/1/18 to 7/30/18.  Your K-1 then shows the values from 7/31 to 12/20.  If you hadn't changed brokers, the single K-1 you'd have received would be the sum of the two you actually got.

- The sales schedule included with your K-1 should show the cumulative adjustments and ordinary gain from the original acquisition date.  That's because none of those adjustments / gains were recognized when you transferred the shares between brokerages.  You can verify this by seeing if the "Cumulative Adjustments to Basis" on the Sales Schedule match the total ROC plus all other basis adjustments (2017 K-1, and both 2018 K-1s) you've reported so far.

- There are two ways you could force this through TT (assuming you're filing jointly):  1) combine the two K-1s (add box 1 together, box 2 together, etc) as though you hadn't changed brokerages.  This will get the correct tax calculated, and be the simplest.  OR 2) Enter each separately, checking "disposition not through sale" on your wife's, and manually adding her passive carry-over to your K-1 so it all releases on your "complete disposition".  This will also make the right tax calculation, but you'll have to simply delete the carryover K-1 from your 2019 tax return (since TT will import that next year).

Again, the only think I'm not comfortable with here is the change in SSN.  It won't matter to the tax calculation, but there may be some nuance to the way the IRS wants it reported that a tax advisor can better speak to.