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Business & farm
You'll want to create separate K-1s for each sub-entity. There's a couple reasons for this:
- The IRS rules on PTPs state that losses from one PTP can't be used to offset income from another. So if you sum across all sub-entities, you can violate that rule. Even though a parent PTP owns the shares of the sub-PTPs on your behalf, you still can't violate that rule.
- If the parent sells off one of the sub-entities in the future, you'd be entitled to recognize any prior year suspended losses for that sub-entity. That only works, though, if you've been keeping separate records.
You also mentioned entering each sub-entity with the "same partnership ID". If you're referring to the 9-digit number that's tied to the PTP, usually the parent PTP provides IDs for each sub-PTP.
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**Note also, I'm not a Tax Preparer/CPA. Just a volunteer, seasoned, TurboTax user.
Use any advice accordingly!
**Note also, I'm not a Tax Preparer/CPA. Just a volunteer, seasoned, TurboTax user.
Use any advice accordingly!
‎June 7, 2019
4:07 PM