So here is some guidance for you:
- The MLP is a pass-through entity and allocates all the income, loss, gains and losses out to the investors. You need to report the K-1 activity on your tax return. Once you indicate in TT that you received a K-1 from a partnership, there will be questions that guide you through the input process.
- Partnerships generally pass out distributions to cover any tax impact, however, if it is nominal that may not occur during the tax year.
- You need to start a basis schedule of your investment in the partnership. This begins with the amount you paid for the stock and will now be updated each year for the applicable lines on the K-1. This basis schedule provides the information as to if you are able to take losses and more importantly will determine the overall gain or loss upon disposition.
*A reminder that posts in a forum such as this do not constitute tax advice.
Also keep in mind the date of replies, as tax law changes.
