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

[gbern]

Thanks for the additional information.

[bennythetaxman69]

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?

[Rick19744]

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).

[sansouci]

I'm a little late but I am working on my return. I've read the other messages but I am still a little confused. If I indicate that this is a "Final K-1", it then asks for what type of transaction on the K-1 worksheet. I am thinking that this is not a taxable sale which is not an option. I could put the purchase and sale dates (although it doesn't seem to be a taxable sale), the proceeds and then use the proceeds as the basis in order not to trigger gain or loss. 

Am I doing this right or is there another method?