Investors & landlords

@poncho_mike The ending capital account is as of 12/31.  

I assume that the K-1, in addition to the $179 dividend, also had some other entries that total -2?  That would explain the $177:  the "Current Year net income (loss)" is always a total of the items on the K-1 that impact taxes.

That makes the $191 the starting basis for those 100 shares, which I can't explain. 

I suggest contacting the K-1 preparer, or the partnership (investor relations will have an email address on their site), or both, to get documentation of the starting value of those shares.  Once you have the documentation, the K-1 itself may need to change (it's possible the 191 is an error).

As to method, I'm not a CPA so if you get different advice from someone who knows some nuance of the code that I'm missing, ignore me.  But I don't like method 1 because it allows you to delay reporting a CG:  by arbitrarily setting the value of the shares to 0, you reduce CG today and pay more in the future.  Since you don't have a justification for setting the share basis to 0, that seems questionable.

And method 3 is going to imply a basis for the MLP shares that, again, may not match what the partnership tells you they're worth.  So again, a conflict.

So that's how I got to method 2, using whatever the correct MLP starting basis is.