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des779
Returning Member

Which ETP K-1 should I use?

Two weeks ago I received a K-1 for ETP.  Last week I received one from ET.  The one from ET includes data for ETP on the Supplemental Data sheet.  Which source should I use when entering data for ETP.  The FEIN is the same. 


Also, I owned ETP until ETE merged with them creating ET.  I never owned any USAC or SUN which also show up on the ET Supplemental Data sheet.  Do I just ignore them?  Thanks 

1 Best answer

Accepted Solutions
nexchap
Level 7

Which ETP K-1 should I use?

First, when it comes to ET, you actually now own positions in USAC and SUN (as well as ETP).  ET owns a stake in each, and you own ET, so their results are passed back to you.  So when you enter ET, you have to create separate K-1s for each sub-entity. There's a couple reasons for this:

  • The IRS rules on PTPs state that losses from one PTP can't be used to offset income from another. So if you sum across all sub-entities, you can violate that rule. Even though a parent PTP owns the shares of the sub-PTPs on your behalf, you still can't violate that rule.
  • If the parent sells off one of the sub-entities in the future, you'd be entitled to recognize any prior year suspended losses for that sub-entity. That only works, though, if you've been keeping separate records.

As for the two ETP's, you add them together.  The ETP K-1 includes financials from Jan 1 to merger day.  The ET sub-K1 includes financials from merger day to 12/31.


**Say "Thanks" by clicking the thumb icon in a post
**Note also, I'm not a Tax Preparer/CPA. Just a volunteer. seasoned, TurboTax user. Use any advice accordingly!

View solution in original post

1 Reply
nexchap
Level 7

Which ETP K-1 should I use?

First, when it comes to ET, you actually now own positions in USAC and SUN (as well as ETP).  ET owns a stake in each, and you own ET, so their results are passed back to you.  So when you enter ET, you have to create separate K-1s for each sub-entity. There's a couple reasons for this:

  • The IRS rules on PTPs state that losses from one PTP can't be used to offset income from another. So if you sum across all sub-entities, you can violate that rule. Even though a parent PTP owns the shares of the sub-PTPs on your behalf, you still can't violate that rule.
  • If the parent sells off one of the sub-entities in the future, you'd be entitled to recognize any prior year suspended losses for that sub-entity. That only works, though, if you've been keeping separate records.

As for the two ETP's, you add them together.  The ETP K-1 includes financials from Jan 1 to merger day.  The ET sub-K1 includes financials from merger day to 12/31.


**Say "Thanks" by clicking the thumb icon in a post
**Note also, I'm not a Tax Preparer/CPA. Just a volunteer. seasoned, TurboTax user. Use any advice accordingly!

View solution in original post

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