your images are not clear enough or my 83 year old eyes new glasses, but let me try again using my # from my sales worksheet,
First what does the MLP provide on the worksheet attached to the K1 and more important relative to the release of passive losses from prior periods: For ages, TT has not clarified the
interview sheet to show a total sale rather than a partial sale.
Numerous postings have pointed that out and still no modification so I use partnership ended rather than disposed of, since the latter could imply either partial or full disposition. Using ended leaves no doubt, and subsequent screens will call for how you disposed etc with a box for by sale. That will produce the desired entry on on form E
showing now available passive losses (current and prior period if you used TT in prior years. (passive losses only usable when you sell your units)
Any way the MLP gives you the broker reported (unadjusted) basis. , the amount of the basis adjustment, and the amount to be reported as ordinary gain on form 4797.
It is up to you to figure out the rest. So, for example, using rounded # from my sale, my total proceeds were 13800.
My broker reported basis 16500. and the broker gain or loss is 13800-16500 or -2700. I am assuming the time period is all long term, but in real life, a portion can be short and the remainder long with 1099 B in sales category B and E
Anyway, the MLP reported a basis adjustment of 10000.
So my adjusted basis is 16500-10000 or 6500. on the sales worksheet. My total gain or loss to be reported to the IRS
is my proceeds 13800 less my adjusted basis 6500 or a preliminary gain of 7300 However, the MLP reported on the sales worksheet that there is an ordinary gain of 8400
so there must be a capital loss of 8400--7300 or ll00 loss
(overall gain 7300 consisting of 8400 ordinary income, and 1100 capital loss. ) Depending on the holding period that loss is either short or long or a portion of both.
So assume it is all long. Go back to the broker entry on the 1099 B where you have entered the broker reported proceeds and the broker reported cost, and adjust the cost to produce a loss of 1100. (check the basis incorrect box
and on the next screen enter the basis that will result in a 1100 capital loss in my example 13800 sales adjusted basis is 14900, There will now be a B code adjustment oh form 8949 to reflect this and I think everyone is happy
with the correct sales, the correct 4797 and the correct
or so I think capital gain and loss.
And if you did not read the prior post when you enter the proceeds on the K1 screen enter zero for sales, the ordinary gain in the ordinary box and the inverse in the basis box
sales zero ordinary gain 8400 and basis -8400.
That eliminates the duplication between the K1 and the broker 1099 , Again if there is short and long holding period, you may to allocate the basis adjustment to show the correct capital gain or loss on Sales category B and E.
Hope that helps, and nothing here is original. Previous contributors were the sources not I.
But there are many issues related to the sales of an MLP
that go far beyond the immediate tax return, namely how to handle UBTI that exceeds $1000 if the MLP is held in a tax deferred account such as an IRA. However that is not an immediate concern if the MLP is in a taxable account.
