Investors & landlords
Are you referring to publicly traded partnerships that report gain or loss on a partnership K-1?
Publicly traded partnership losses have minimal use for the unit holder.
- If a certain PTP has a loss, that loss can only offset earnings in the future from that same publicly traded partnership.
- This is unlike non-PTP passive actions, in which allocated losses can go toward offsetting earnings for other passive actions.
For instance, PTP A reports $5,000 loss and PTP B reports $5,000 gain. You are not allowed to net the gain against the loss on the 2022 Federal 1040 tax return.
You report the gain and pay income tax on the reported gain.
You hold the loss in suspension until such time that you can offset that loss against a gain from that same publicly traded partnership.
The partnership K-1 (Form 1065) records the partnership as a publicly traded partnership in Part I box D.
