I'll try to answer, as well as to be clear on what I'm certain of and where I don't know:
- I also own ET, and had 7 different K-1s in TT for the entity. The reason: 1) ET ex box 2, 2) ET box 2, 3) ETP ex box 3 4) ETP box 3, 5) USAC, 6) SUN ex box 2, 7) SUN box 2. You absolutely have to split them this way, because (as the instructions in the ET K-1 package state), passive losses can only be offset by passive gains from the same PTP. If they weren't split, then the tiny amount of positive business income reported for ET would have released losses from USAC. That's not allowed.
- Listing each K-1 as something like "ET (USAC entries)" is a great way to keep track of everything.
- I'm not sure whether its correct to put them all under ET's FEIN, or the one listed by ET on the breakout page. On the one hand, the IRS computer may want to sum all the separate K-1s to make sure they add to the master. That argues for the same FEIN. On the other hand, if the same PTP shows up in multiple places (e.g., suppose SUN is owned by ET, by ABC, and by you separately), you have to be able to combine those 3 different sets of financials. So its a confusing mess. In this case, it won't really matter so if you have a CPA telling you to do it one way, go with that.
Once you've got all your ET entries done, you still have this final K-1 from ETP. Two options here, depending on what you do with the FEINs:
- If you start listing "ET (ETP entries)" under the ET FEIN, then you'd enter your standalone ETP K-1 as a "Final", "Disposition not via a sale". This will leave the losses suspended.
- The easiest way to get those suspended losses over to your new ETP holding (which is where they need to sit) is to wait until next year. Then, when your entering "ET (ETP entries)" again, it will ask about suspended losses from prior year. Here, you'd combine the losses from the two K-1s.
Hope this helps. Its confusing. I'm not sure that even the IRS is clear on the nuances (as the K-1 package says "the application of passive loss limitations to tiered PTPs is not entirely clear.")
