Investors & landlords

I will provide some guidance for others that may be in this same position:

• TC Pipelines was a publicly traded partnership (PTP)
• As such, this was deemed a passive activity for purposes of the passive activity rules
• When PTPs are held, these entities are not netted with other passive activities.  Each PTP is treated separately.  This means that each PTP losses are tracked separately and can only be used against income from this same PTP or when there is a complete disposition of the PTP.
• This transaction was treated as a merger where each unit holder of TC Pipelines received 70 shares of TC Energy for each 100 units of TC Pipeline owned.
• As a result, there is no complete disposition of TC Pipelines; it is now TC Energy.
• Each unit holder of TC Pipelines should have been maintaining a basis schedule of their investment in the PTP.
  • This basis schedule should be updated for the applicable final K-1 figures.
  • This basis amount is now your basis in your TC Energy stock.
  • However, if the PTP had any suspended losses, these suspended losses are added to your tax basis noted above.
• This is why there is no sale or exchange information provided; there was no sale or exchange.
• At this point, I would just update TT with the final K-1 amounts and not indicate that this is the final year.
• Doing this will allow TT to compute the correct PTP income or loss.
• Once the return is complete, you will then know the actual suspended losses, if applicable, and then add this amount to your tax basis.
• Next year you will need to eliminate all the suspended losses from TT, mark the PTP as final and you can just show no gain or loss.
• If you are savvy enough to do this later part in the current year, go for it.
• Good luck