i disagree with what has been suggested to report the sale of all MLP shares. your cost and sales price are not the same.
MLP reporting k-1 and 8949
you should have gotten as part of the k-1 package a supplemental schedule from which you can compute your property tax basis and an ordinary income recapture on the sale
Enter the k-1 info
Check the PTP box
If total disposition and then proceed as follows:
Check final K-1 (s/b marked on actual k-1)
Check sold or otherwise disposed of your entire interest.
Use QuickZoom link (desktop forms mode ) to get to the sale/disposition info section.
On the k-1 disposition section answer the questions such as how you disposed of it and the dates involved.
For sales price use the ordinary income (sometimes you’ll see a column with the “751” or the words “Gain subject to recapture as ordinary income”. This info comes from the supplemental sales schedule that should have been provided. the same amount is on the k-1 in box 20AB
Cost is zero
Ordinary income is the sales price.
This info flows to form 4797 line 10 and is taxed as ordinary income.
Now for the 8949.
The broker’s form is probably coded as B or E – sales proceeds but not cost basis reported to the IRS. This is because the broker does not track the tax basis. It used what you paid originally which is not correct.
tax basis; this is where different PTPs/MLPs report differently on the supplemental schedule.
Some will provide a column labeled something like "Total adjusted basis for capital gain/loss purposes" that's what you would use as your cost/tax basis. Others aren't that nice. they will have a column labeled "Cost Basis" or "Total adjusted Cost Basis" to which must be added the section 751 amount
Some other things. Look at lines 20Z1. That number should be added to the ordinary income above for reporting the 199A (qualified business income from the PTP). You don’t have to enter this but then you lose
out on a tax deduction = 20% of this amount
there is a way to check out your tax basis before the 751 adjustment. look at section L on the k-1 which is reported on the tax basis. Beginning Capital account + capital contributed during the year (should be your cost of shares purchased during the current year) + current year net income or - current year net loss - distributions reported on line 19 of the k-1
