I have two PTP's that I have held for years, buying more units when my basis (in the Capital Account of the K-1) nears zero.
The PTP distributions are treated on a "first-in/first-out" basis so the original investment must be returned before any capital appreciation, which would be a dividend--that is what makes these PTP's tax deferral shelters.
My question is, if I sell a specific lot, can I treat it as I would a normal stock sale? Does IRS have any special rules requiring some special first-in way of doing it?
I know that I would have to go back and pro-rate each of the quarterly payouts to the lots held at the time, being careful of EX-DIV dates, etc.. (Quicken refuses to do this for dividends and returns-of-capital even though I told them how a programmer could do it with the data they already keep.)
I am not sure whether I will go ahead with this, but I am thinking about how messy if might be--selling the whole position is already messy enough.
