PatriciaV
Expert Alumni

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.

 

@nlavery 

 

[edited for clarity 3/5/25 | 12:40 pm]

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