Where do I accurately account for a sale of a publicly traded partnership if my K-1 lists more accurate details of the sale than my 1099-B?
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New Member

Where do I accurately account for a sale of a publicly traded partnership if my K-1 lists more accurate details of the sale than my 1099-B?

I sold all my shares in a publicly traded partnership. The brokerage provided 1099-B, but did not list any adjustment to basis. However, the PTP provided a sales worksheet along with their K-1 that lists an "adjustment to basis," as well as "ordinary gain." 1) What is ordinary gain and why am I accounting for it? 2) Were do I account for these adjustments? In the K-1 section of TT or the 1099-B? 3)The adjustment to basis is actually listed as a negative number, and the instructions have me subtracting this from the sales proceeds...which would actually make my proceeds larger. What does a negative adjustment mean and why does it make my gain more?

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New Member

Where do I accurately account for a sale of a publicly traded partnership if my K-1 lists more accurate details of the sale than my 1099-B?

I have a similar issue - do not know how to handle the sales schedule on K1 in conjunction with the 1099 from broker for the same sale.
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Returning Member

Where do I accurately account for a sale of a publicly traded partnership if my K-1 lists more accurate details of the sale than my 1099-B?

I have the same situation, and the sale of the MLP is on 1099B as a noncovered tax lot, where basis is not reported to IRS. I also have a sales worksheet from the MLP with adjustment to tax basis listed, but an confused about the next box (which is empty) for Partner Level Adjustments to Basis. What do these include and where can I find this information if I need to include it?
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New Member

Where do I accurately account for a sale of a publicly traded partnership if my K-1 lists more accurate details of the sale than my 1099-B?

I have the same question but from a slightly different angle.   My PTP was was held in a brokerage account. When the PTP was sold in 2014 the data I imported from my financial institution includes the sale with other trades.  Will this be duplicated using the sale information that I included when entering the K-1 data?  If so, where will TTAX include the sale information that was entered with the K-1 data?   should I then delete the item that was included with the imported data?  Also, on the step-by-step "Describe the Partnership" page,  there is a selection for "Disposed of a portion of my interest in partnership during 2014" but there is none that says I disposed of the my entire interest so how should I indicate this (or does "a portion" include the whole thing?).  When I checked the portion box then on the associated form the box for disposing of the entire partnership did not get checked?  I assume the box for "this partnership ended in 2014" is NOT the box used to indicate I sold my entire interest ... right?

Update:  Looks like this question was asked and answered (a LOT!) in this TTAX blog thread:


The answer that I choose (from the list of 18 comments on the initial response ... which didn't seem to be optimum) was to
(1) go ahead and enter the K-1 sale info during the K-1 interview then (2) to go back to the imported 1099-B entry with the sale from the broker and adjust it so that cost basis to equal the sale price (no gain/loss).  In my case this is preferable since the gain the broker reported did not match the gain that was provided in the K-1 package..  I choose the comment provided by LindaBelmont as answering the question on how to correctly report the K-1 sale.  Linda says "Here is how I do it (and have never been questioned by the IRS)".  Another comment-er suggested that it was an ERROR for the broker to have included this sale data on the 1099B since it needed to come from the K-1.
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New Member

Where do I accurately account for a sale of a publicly traded partnership if my K-1 lists more accurate details of the sale than my 1099-B?

Regarding dmkn566's question about "Partner Level Adjustments to Basis", in my case this information was provided in the supplementary information that came with my K-1 tax package.  In my case the instructions contained the following:

We have provided you with the Adjustments to Basis in Column 6, which includes partnership income, deductions, distributions, etc. To calculate your Total Gain or Loss in Column 7, subtract the sum of the Purchase Amount in Column 5, and Adjustments to Basis in Column 6, from the Sales Proceeds in Column 4. To calculate your Capital Gain or Loss in Column 9, subtract the Ordinary Gain in Column 8 from your Total Gain or Loss in Column 7.

I understood the partnership basis for input to TTAX is then the Purchase Amount (your original basis) plus the adjustments. The K-1 package I received included a "Ordinary Gain" value which I input on the TTAX Sale Information page.  
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New Member

Where do I accurately account for a sale of a publicly traded partnership if my K-1 lists more accurate details of the sale than my 1099-B?

Partner Level Adjustments to Basis.

KMP sales sheet says they can be "additions to basis for distributions in excess of basis for which you have reconized income" That would be any 19A taxable, to you, distributions the MLP included in their basis adjustment.

If you still have a negative basis then report it as $0 per IRS K-1 inst Page 2.

Or at least thats how i think it works 😉 

Useful K-1 answers

State Taxes


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New Member

Where do I accurately account for a sale of a publicly traded partnership if my K-1 lists more accurate details of the sale than my 1099-B?


1.  This is a memo I typed for myself after finally figuring this out.  I use Vanguard and thus you should susbstitute your broker's name when you see Vanguard. To enter capital gains/losses and ordinary recapture on the sale of partnership interests as reported on brokerage statements and K-1’s, follow the following instructions: [NOTE: This approach avoids entering totals received from the broker and then trying to figure out where basis adjustments etc. reported in the K-1 package go. Make each 1099-B broker statement an EXHIBIT to attach to the return which reflects the adjusted totals and enter the totals on the appropriate TurboTax input schedule as indicated below. Although the Exhibit may not be required, I always attach them.  [Use the FORMS approach to enter the data outlined below NOT the EasyStep – which I’ve never used.  As a retired CPA who specialized in taxes, I use the FORMS approach.] This is rather lengthy, I suggest you print it out.

 

2.   FIRST STEP:  Enter the K-1 data on the K-1 entry sheet.   {Assuming ALL units are sold} - on the “Final/Amended” section at the end of Part II, click on the:

a.   Final K-1 box

b.   Partner sold or otherwise disposed of entire interest box….

c.   Click on the QuickZoom button –  then to Part II Disposition of Partnership Interest

                                              i.      Check boxes on 1a and 1a(1)

                                            ii.     Enter dates etc on Line 2,3&4.

                                          iii.     Enter “0”s on Selling Price and Basis, line 5 & 7, at the bottom of the schedule. Do not enter the actual data here.

3.   SECOND STEP: Go to the schedules in each K-1 package from partnerships sold which show the adjustments to basis required, and the ordinary income portion etc.

a.   Determine the number of units sold for Long-term and Short-term transactions respectively from the Vanguard statements of sales. Draw a line to separate the two categories. Add and note total L/T and S/T adjustments.

4.   THIRD STEP:  Make a copy of each Vanguard 1099-B schedule of “Proceeds from Broker and Barter Exchange Transactions” to become EXHIBITs to reflect the adjustments. Enter each adjustment for each partnership at the bottom of the schedule for the basis/gain/loss info shown in the 1099-B.  The sum of each column is the adjusted amount to enter on the input sheets. The EXHIBITs will be attached to the return. There will generally be four (4) 1099-B’s to reflect:

a.   L/T – Basis reported to IRS [Box 3] transactions

b.   L/T – Noncovered securities - basis not reported to the IRS [Box 5]

c.   S/T – Basis reported to IRS [Box 3] transactions

d.   S/T – Noncovered securities - basis not reported to the IRS [Box 5]                                          

                                            i.     The name for each one should contain the relevant description, e.g. “Taxpayer Name L/T Basis Reported…” etc which will make it easier to find each one in the left margin menu in FORMS mode.

5.   FINAL STEP:  The totals after adding/(subtracting) the adjustments determined on the above 4 schedules will be entered on two different TurboTax Schedules:

a.   Use a separate CAPITAL GAIN (LOSS) TRANSACTION WORKSHEET for each of the categories listed above – creating 4 different transaction statements.

                                              i.      L/T – Basis reported to IRS [Box 3] transactions

                                            ii.     L/T – Noncovered securities not reported to the IRS [Box 5]

                                          iii.     S/T – Basis reported to IRS [Box 3] transactions

                                            iv.     S/T – Noncovered securities not reported to the IRS [Box 5]

                                                 On each one:

????????????v.?Complete the relevant info in Part I.

                                            vi.     On Part II,

??????????????1.   Line 4 Company Name – enter SEE EXHIBIT “x”. 

??????????????2.   Lines 5c and d – VANGUARD and a/c number

                                          vii.     Part III – enter relevant info on lines 4 and 5

                                        viii.     Part IV – check boxes on lines 1, 2 and 5b

                                          ix.     Part X – this is where the key info is entered for sales price, cost etc. on lines 4 and 5.  On line 7 “Total adjustment to gain (loss)” enter the Ordinary Gain as a negative number. [This ordinary piece will be entered as a positive amount on Form 4797 in the next step]. The adjusted gain should agree with the adjusted gain determined on the EXHIBIT.

??????????????1.   Note on line 9 the codes can be determined by putting your cursor on the box and click on the HELP CENTER in upper right. Then click on “Form 8949 Adjustment Codes” in the popup box. Generally it should be BMO.

b.   On Form 4797 Sales of Business Property input form, pg1, enter L/T and S/T ordinary income adjustment amounts on two separate lines:

                                              i.     Column (a) Description – enter the name of the EXHIBIT “x” -ORDINARY.

                                            ii.     Column (d) Sales Price – enter the ordinary amount. [no other info is required – only sales price.] These amounts will show up on the two parts of the Form 4797 which you select in the next steps.

                                          iii.     Column (h) indicates whether its short-term [goes in Part I] or long-term [goes in Part II].

                                            iv.     Column (i) – your selection is for Taxpayer or Spouse ownership.

c.   This should complete the process. Review Schedule D and Form 4797 to see that the L/T, S/T capital gains on D and the L/T, S/T ordinary income totals are properly reflected and agree with the totals from the EXHIBITs above.  If you followed the details above, they should!  Good luck.



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New Member

Where do I accurately account for a sale of a publicly traded partnership if my K-1 lists more accurate details of the sale than my 1099-B?

The awnser is a little complated and might not exactly match your situation, but you can learn alot from...

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New Member

Where do I accurately account for a sale of a publicly traded partnership if my K-1 lists more accurate details of the sale than my 1099-B?

What about the "AMT gain/loss adjustment" on the PTP sales information sheet?  Does it apply to the AMT basis, to the AMT ordinary income, or both?

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