Per title, I sold all interest in a Master Limited Partnership (MLP) last year and need to report the income from this sale on my NJ state tax return.
I already received the federal Schedule K-1 (Form 1065) from the MLP which also contained the Sales Schedule with information on the disposition (such as "Gain Subject To Recapture As Ordinary Income") that I used in conjunction with the details on the 1099-B to calculate the actual capital gain for the sale of this MLP. So I'm all set on the federal tax return.
While the state K-1's won't be available until June/July, the MLP noted that there was no activity to specifically report to NJ, so I'm trying to manually create the Schedule NJK-1 myself.
I entered the ordinary business income (Box 1) from the federal K-1 into Line 1, Col A and zero into Col B of the same line on NJK-1. That flows down to Line 4 with the same values for Col A and B.
Now, on Line 6 "Net gain (loss) from disposition of assets as a result of a complete liquidation" is the relevant part about my question:
1. Should I enter the actual capital gain that I calculated using the K-1 Sales Schedule and 1099-B?
2. Or should I enter just "Gain Subject To Recapture As Ordinary Income" that was reported on the K-1 Sales Schedule?
3. Or just leave it blank (since I'll be attaching the federal Schedule D that already includes the actual capital gain derived from the disposition)?
My apologies for the lengthy post. Any clarification would be appreciated.
