Thank you, Juliane22! This is helpful, but I still have some questions.
It seems like K-1s from PTPs often result in a lower taxable income, at least initially, due to things like return of capital and potential losses. Is this generally the case?
You mentioned estimating tax liability. Since PTPs can be complex, what's the best way to estimate my taxes if I haven't received all my K-1s by April 15th? Can I rely on previous years' K-1s? My holdings have changed – I've bought more units in some PTPs and invested in new ones this year, so I don't have a good baseline.
To confirm, even with an extension, I should aim to pay any estimated tax due by April 15th to avoid penalties, correct? But I might still owe interest on that amount if it's paid after April 15th?
If I file initially without all the K-1s and then later file an amended return that results in owing taxes, will I be penalized as long as I paid at least 90% of my total tax liability by April 15th? What are the potential penalties if I underpay?
As a new investor, this is all quite overwhelming! Should I avoid PTPs entirely, or are there ways to manage the complexity? Any advice from a tax expert who has worked with many PTP investors would be greatly appreciated.
