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Investors & landlords
Accurately reporting PTP/MLP income and transactions in TurboTax involves several steps:
Step 1: Gather your tax documents:
- Form 1099-B: Reports the sale of stocks, bonds, mutual funds, and other securities.
- Schedule K-1 from the PTP/MLP.
- Supplemental information provided by the PTP/MLP detailing income recapture (included with K-1).
Step 2: Entering Schedule K-1 Information
TurboTax Online:
- Log in and open or continue your return.
- Go to K-1.
- On the Schedules K-1 or Q page, select Yes.
- On the Did you receive any Schedules K-1? page, select Yes.
- Select Start next to the type of Schedule K-1 form you have (Form 1065 for partnerships), and enter/review your information.
TurboTax Desktop:
- Open TurboTax and continue your return.
- Select Search Topics. Search for and select K-1.
- On the Schedules K-1 and Schedule Q screen, select Yes.
- Select Start next to the type of Schedule K-1 form you have (Form 1065 for partnerships), and enter/review your information.
Enter PTP/MLP Details:
- Confirm/Enter the partnership's Employer Identification Number (EIN) and other relevant information as shown on your Schedule K-1
- Check the box for “This partnership ended in 20XX.”
- Choose “Complete disposition” or "Disposed of a portion..."
- Choose “Sold Partnership Interest.”
- Enter original purchase and sale dates.
- Enter Sales information from Schedule K-1 Supplemental Information.
Note: Since you received a 1099-B for this transaction, it's important to make sure $0 of Capital Gain is reported on the K-1, as follows:- Sale Price = zero
- Partnership Basis = amount of ordinary gain from Supplemental Info multiplied by -1 (ie: reverse the sign).
- AMT Basis = amount of ordinary gain for AMT from Supplemental Info multiplied by -1 (ie: reverse the sign).
- Ordinary Gain = gain/loss per Supplemental Info.
- On the screen "Review Investment Gain or Loss on Sale," verify that this screen reports all zeroes. This is the expected outcome if your entries are correct.
Input Income and Deductions:
- Enter amounts from each box on your Schedule K-1.
- Box 1: Ordinary business income/loss.
- Box 20 (Code 2): Section 199A information.
- Box 20 (Code AB): Section 751 gain/loss
- Passive Loss Carryovers as negative numbers (regular, AMT, QBI).
Step 3: Entering Form 1099-B:
- Navigate to the 1099-B section:
- TurboTax Online/Mobile: Go to 1099-B.
- TurboTax Desktop: Search for 1099-B and select the Jump to link.
- Follow the onscreen instructions. When you reach "Let's import your tax info," choose how you want to enter your 1099-B:
- To import your form: Select your brokerage or financial institution from the list. Enter your sign-in credentials for your account, then select "Get my form."
- To enter your 1099-B manually (recommended): Select "Enter a different way," then select your investment type on the next screen.
- On the following screens, answer the questions about your 1099-B. When you reach the "Review your sales" screen, the form you just imported should be listed.
- Otherwise, to add another 1099-B, select "Add investments."
- Select "Continue."
- Enter the details from your Form 1099-B (separate long-term and short-term):
- Note: If the K-1 Supplemental Information has separate long-term and short-term sales, allocate the 1099-B information between the two, using the percentages provided on the K-1 Supplemental Info.
- Long-term/Short-term basis not reported.
- What investment did you sell [Stock (non-employee)]
- Description: "Sale of [PTP/MLP Name] Units."
- Date acquired & sold.
- Proceeds from sale: (portion for this section, if allocating).
- Cost basis:
From K-1 Supplemental Info: Original Cost plus/minus Cumulative basis adjustments plus/minus Ordinary Gain/Loss from Section 751. - Example:
- Original Cost = $100,000
- Cumulative adjustment to basis = ($20,000)
- Ordinary Gain = 15,000
- Adjusted Cost Basis to enter = 100,000 - 20,000 + 15,000 = $95,000
- No special situations.
- Result should equal Capital Gain/Loss from K-1 Supplemental Info.
- Add another sale for short-term, if allocating
TurboTax will report the capital gain or loss on Schedule D (Part I - Short-term; Part II Long-term) and ordinary income on Form 4797 Part II Line 10.
[edited for clarity 3/5/25 | 12:40 pm]
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March 5, 2025
8:47 AM