@Frank145
Hi Frank -- I assume the thread you mentioned trying to follow was this here: https://ttlc.intuit.com/community/investments-and-rental-properties/discussion/how-i-report-the-sale...
The original response to that message was intended to be the "simple" step by step process. The next 5+ pages of questions and comments went on to demonstrate that "simple" and "MLP" don't seem to fit together.
Your situation is a good example. In one sense, a complete sale ought to be easy to enter. But your negative cost basis is a problem: cost basis can't be negative.
This highlights an issue with K-1s in general: they don't always hand you the numbers that need to be copied over into something like TT. They give you data, that you have to then use in your own record keeping. Negative cost basis is an example of that. The K-1 preparer knows they can't be negative, but its up to you to figure out how to deal with that so they don't try to adjust the K-1.
In the year your Capital Account (Section L) went to 0, you no longer had "capital at risk" and needed to start segregating your losses (they couldn't simply be suspended anymore for eventual sale). In the year the sum of your Capital Account and any Nonrecourse loans went to 0, you no longer had "basis" and had to start declaring your distributions as long term capital gains (and any losses simply went away).
If your prior year returns have dealt with all that correctly, great! If not, you may need to amend them. Either way, the sales schedule you received in the K-1 is going to need to be replaced with something that brings your cost basis to 0 (not negative), and the suspended losses that TT will put on Sched E need to be adjusted accordingly. That is far from simple, and this is where I always advise finding a CPA / tax preparer to help.
Sorry I can't be more help.
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**Note also, I'm not a Tax Preparer/CPA. Just a volunteer, seasoned, TurboTax user.
Use any advice accordingly!
