The information provided by our awesome Tax Champ @Rick19744 gives all the details necessary for this particular holding. The basis schedule is used as follows and provides details to complete your tax return. Additional notes are included below to help you.
- Each unit holder of TC Pipelines should have been maintaining a basis schedule of their investment in the PTP. (You should have this from prior years).
- 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.
- Suspended losses would have occurred in an earlier year. These are losses you were not able to deduct in the past because a PTP is only allowed to reduce it's own income by any prior year losses. This continues until there is a full disposition of the investment (Final k-1). Once a disposition does occur, all prior suspended losses are allowed to be used in the same year.
- This is why there is no sale or exchange information provided; there was no sale or exchange.
- At this point, I would just update TurboTax with the final K-1 amounts and not indicate that this is the final year.
- Doing this will allow TurboTax 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.
- The sale or disposition takes place inside the K-1 entry. Go back to complete this and select Complete Disposition and then select Sold > Follow the screens to answer the questions.
- Next year there will be nothing to report, but now you can mark it Final with no other action and 2022 should not show the K1 activity.
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