Nexchap - Thanks for all of the advice on this forum. I think that I understand your logic but wanted to ask you two specific questions about passive loss carryovers. First, how is the carryover calculated for the final year of an MLP holding (I sold it all in 2018) if it is not automatically pulled from last year's return via Turbotax? I don't see anywhere on my K-1 where it shows the income (loss) that reflects my multi-year holding period. I'm assuming that it is as simple as adding the Ordinary Business income from each K-1 to get a total.
In my case, I was trying to use the "This Partnership Ended" prompt in Turbotax to activate passive losses from prior years. I had $1,000 in cumulative passive losses but had a $300 ordinary gain on the sale of the MLP. When I use this methodology, it seems to over inflate my tax rebate. It adds about $200 to my rebate. This doesn't make sense to me given that I have never paid taxes on distributions from this partnership in the past. Therefore, I'm assuming that the proper way to treat this is to instead check "Disposed a portion of my interest in 2018." When I perform the latter, the ordinary gain is offset exactly by $300 in losses that shows up on Schedule E.
Any advice that you can offer is much appreciated.
