How do I enter a section 751 statement?

[JaimeG · Accepted solution]

There is no set format for a Section 751 Statement. It's basically a letter providing the details required by the IRS:

• The transfer date
• The amount of gain or loss attributable to the Section 751 property (ordinary income/loss)
• The amount of gain or loss attributable to capital gain or loss on the sale of the partnership interest.

The statement should also include:

• Your name as it appears on your tax return
• Your SSN
• The tax form and year (ex: 2015 Form 1040)
• Name of Partnership interest that was sold (optional, but helpful)

If you have supporting documents that are required to be submitted to the IRS, you will need to mail in Form 8453, U.S. Individual Income Tax Transmittal for an IRS e-file Return, within 3 business days after you have received acknowledgement that the IRS has accepted your electronically filed tax return. Include your name, address and social security number on the Form 8453. If you filed a joint return, the name and social security number of your spouse is also required.

Mail Form 8453 with supporting documents to:
Internal Revenue Service
Attn: Shipping and Receiving, 0254
Receipt and Control Branch
Austin, TX 73344-0254

1. Print a copy of your completed Form 8949. At the bottom of Form 8453, check the box for Form 8949
2. In Forms Mode, click on Forms and type in Form 8453 to bring it up on the screen. Fill in the data then print it.
3. Using the example in the K-1 tax package, on a sheet of paper, type the 751 statement.
4. Mail these documents to the address above.

[ngl0ml]

1. If I e-filed already what's the point of sending a printed copy of completed form 8949 together with 8453? Is that really necessary?
2. I thought just “IRC SECTION 751 STATEMENT” that came together with K-1 schedule from partnership and maybe also sending "Sales Worksheet" together with that would be enough. The things that you say should be part of the letter is all included in K-1 package. Why not simply include K-1 as attachment but it was already mentioned not to send that to IRS on K-1 so the first part of your answer seems to be inconsistent.  
3. For cases such as mine where I traded 3 PTPs each at most $1000 worth this sounds like an overkill. Is there a rule that relaxes mailing of irc 751 statement if the traded amount or taxed amount is below certain amount?
4. Isn't there a way to submit the statement through e-file, if SSN and good chunk of my tax info will go in mail, what's the point of e-filing other than receiving return a little sooner?

[ClaireT6]

If I read it correctly, Form 8453 says to only attach 8949s if you elected not to report your transactions electronically on 8949. Therefore, if you already e-filed them can you just mail in the Section 751 statement with all the info you stated in your first two paragraphs without Forms 8453&8949? If yes, where do you mail the statement? Is it mailed to your regional IRS office? I couldn't find any info on the Texas branch you provided. If I did not understand it correctly, can you please explain.  Thanks.

[ccsurgery]

Claire:

I totally agree with you. This is for my 2022 return, which I will file electronically. I printed out form 8453 from the IRS and it specifically states to "file this form only if you are attaching one or more of the following forms or supporting documents". The last box deals with form 8949. However, it says to only check this box if you elected NOT to file 8949 electronically. However, my return had a copy of 8949 filed electronically. Therefore, I doubt one would need form 8453, and one might need to just mail the generic Section 751 letter to the IRS outlining the date of sale, amount in column 7, and the capital gain/loss for each sale (contained in the sales schedule one would get from the PTP after the sale)

[Mike9241]

the short answer is that if you need (want?) to file the 751 statement you must mail it in with your return. it can not be filed separately and as you have noted it is not an option on the 8453.  the statement is not an IRS form or schedule so even if Turbotax wanted to include it in its apps there may no way to transmit it electronically.

since millions of shares of PTPs/MLPs are sold every year and every sale requires the 751 statement, the IRS could ease the taxpayers' burden by allowing either a check "the 751 box" on schedule E for the partnership i or create a "751" schedule or form that could be e-filed.  I'm guessing but since yours is the first I've seen about the 751 statement issue, many others probably don't know they're supposed to file it or don't bother to.

[Unsure99]

Unfortunately, Mike9241 is correct. And I agree it is definitely something the IRS should fix. Ridiculous to have to mail in entire return for a single statement.

[dlbfsa]

Thank you so much for the comprehensive answer!