I'm hoping someone here can wake me up from this nightmare. Or just put me out of my misery...
4 years ago I made the dumb mistake of buying a PTP through my broker thinking it was a stock with great dividends. Oops. Four K-1s later, after dutifully entering all the data into TT Premier and paying whatever taxes it told me to pay while the PTP price tanked, I decided to finally get rid of all the units of this disaster in 2020. I was excited to end this ignorant chapter of my life. Oh no, the PTP wasn't done with me yet. Here's a summary of my situation. Does this sound right????
- I invested ~30K in the PTP
- I only received 1805 in distributions total, the last of which occurred in 2018
- Each year TT had me paying taxes on the Box 3 rental income, Box 5 interest income, and Box 9a Net Long Term Capital Gain income, even though I never saw a penny of this income, all the while Box 1 ordinary income was racking up losses
- By 2020 I have accumulated about 73K of passive ordinary losses and about 5K of section 1231 losses, and paid taxes on about 6600 of never received rental income, 160 of never received interest income, and 140 of never received capital gain income
- I dumped all the units for about 4K, so looking at a 26K long term capital loss just on face value of the trade
Then I get my sales schedule with the K-1 and it gets worse:
- It says my adjusted cost basis is -80K (an adjustment of -110K)! So my total gain is 84K?
- It says that my ordinary income to be recaptured is +87K! That's more than the losses I have accumulated can cancel out. Where was all this income the past four years? Where is it now?
- After filling in the blanks on the sales schedule I get a total gain of 84K, ordinary gain of 87K and capital gain (loss) of -3K. After using up all my passive ordinary losses that still leaves me with 9K in ordinary income to pay tax on and just a 3K capital loss.
I just want to take my 26K long term capital loss, and be able to deduct about 7K of the income that I never saw but already paid tax on because of this investment.
So before asking any specific questions I just have to know, am I missing something?? Does any of this sound right?? This investment has at no time made any money and yet I've been paying taxes on it, and will pay more taxes on it even after I got rid of it!
Thank you to anyone that can enlighten me because I'm in a pretty dark place right now!
