Reporting Sale of
publicly-traded limited partnerships
Steps to report the gain
on sale of your publicly-traded limited partnerships:
1. Enter “0” (zero) in the
Sale Price & Partnership Basis blocks of the K-1 “Enter Sale Information”
interview screen. You can leave the Ordinary Gain Entry the same as reported on
the K-1
"From the Schedule K-1 Partnership 2014 (Form 1065) Additional
Information worksheet in the TurboTax program, Instructions on reporting
Disposition of Partnership Interest:
If this is a full or partial disposition of a publicly traded
partnership (PTP) or master limited partnership (MLP) that was reported to you
on a Form 1099-B, enter a sales price of zero on line 5 and a basis of zero on
line 7 below. Enter the 1099-B transaction on Schedule D, checking the
appropriate "Reported on 1099-B" box A or B.
Line 5 Sales price (If box 1a(4) is checked, enter estate
valuation.)
Line 7 Basis of partnership interest"
2. Enter the 1099-B as a
Box A (or D) Transaction (Short term (or Long term) with cost basis reported to
the IRS) and check the Add More or Edit) Details box just below the Description
Box. If, after taking into consideration the information already reported on
the K-1, you need to correct the basis reported on the Form 1099-B, you can do
so by selecting “I need to add or fix info about this sale that’s on my Form
1099-B.”
This includes taking into
consideration the ordinary gain you reported in the “Enter Sale Information”
interview screen of the K-1.
The
Adjusted Cost Basis in the Correction interview is just that – an Adjusted Cost
Basis. It is NOT an adjustment to the basis reported in the 1099-B. If you need additional guidance on calculating the adjusted basis, pleas update this answer with a "Comment".
When these entries are made, everything will
flow correctly to the Form 8949, Form 4797, Schedule D and Form 1040.
There will be two Form 8949s – one reporting
the entire gain as shown on the 1099-B (STCG or LTCG), and the other backing
out that gain as an adjustment (source was K-1 Ordinary Gain entry mentioned
above).
