@nexchap: I wanted to ask about an issue I have not yet seen addressed in this thread - a new issue for 2018, post-TCJA. What happens to "excess business interest expense" (line 13K on K-1) in the year of a complete disposition of a PTP/MLP interest?
Generally, it would seem that 13K amounts would offset any line 20AF amounts ("excess business interest income"), or be carried forward into further years to offset income in that same category; this would be similar treatment to PTP/MLP losses in general. My specific situation here revolves around EEP, which ceased to exist once ENB bought out all of its sponsored vehicles in 2018.
It looks like this 13K amount is included in the "adjustments to basis" on both the K-1 and the Sales Schedule; however, there is no place in which this item is actually taken as a deduction (at least that I can tell). Should this be added back to the basis in the year of a complete disposition? Given what you have laid out previously for calculating PTP basis (thank you very much!), this would seem to be an adjustment to the "adjustment to basis" that appears on the Sales Schedule, yes?
Since this is new for 2018, it seems the IRS guidance isn't yet fully formed, and the Form 8990 that the IRS has produced to track/calculate these amounts isn't integrated into TurboTax yet. I ended up with a capital loss from my EEP position following the ENB "buy-in" last year, and I'm trying to figure out if this 13K amount should have resulted in a larger capital loss (increased by the 13K amount). I'd appreciate any thoughts you might have.
EDIT: I found this post on another site (https://www.investorvillage.com/smbd.asp?mb=5028&mn=100227&pt=msg&mid=19225548) in which, at the end, the OP confronts the same issue. His suggested solution (emphasis on "suggested") is to add the 13K amount to the Line 1 amount (adding expense to a loss, to create a larger Line 1 loss). The core issue here would seem to be whether this is considered an ordinary income/expense item, or a capital gain/loss item. Upon reflection, his idea seems to make more sense. But adjusting Line 1 (which is fixed and reported) rather than basis (which even the IRS expects to vary) seems risky to me.
FURTHER EDIT: Appear to have found the answer. In the proposed IRS regulations for this matter (https://www.irs.gov/pub/irs-drop/REG-106089-18-NPRM.pdf), the IRS states (on pages 267-268) that, for a complete disposition, "the adjusted basis of the partnership is increased immediately before the disposition by the amount of the excess." So it would seem that my original thinking was right after all? Unless I'm missing something?
