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How do I report ordinary gain amount adjustment with sale of PTP interest that is part of 1099-B form?

Forum|Forum|7 years ago
June 6, 2019
6 replies
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The ordinary gain adjustment amount comes as part of the K-1, separate from the 1099-B form.

TurboTax Deluxe Windows

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Reporting Sale of publicly-traded limited partnerships

Steps to report the gain on sale of your publicly-traded limited partnerships:

1. Enter “0” (zero) in the Sale Price & Partnership Basis blocks of the K-1 “Enter Sale Information” interview screen. You can leave the Ordinary Gain Entry the same as reported on the K-1

"From the Schedule K-1 Partnership 2014 (Form 1065) Additional Information worksheet in the TurboTax program, Instructions on reporting Disposition of Partnership Interest:

If this is a full or partial disposition of a publicly traded partnership (PTP) or master limited partnership (MLP) that was reported to you on a Form 1099-B, enter a sales price of zero on line 5 and a basis of zero on line 7 below. Enter the 1099-B transaction on Schedule D, checking the appropriate "Reported on 1099-B" box A or B.

Line 5 Sales price (If box 1a(4) is checked, enter estate valuation.)

Line 7 Basis of partnership interest"

2. Enter the 1099-B as a Box A (or D) Transaction (Short term (or Long term) with cost basis reported to the IRS) and check the Add More or Edit) Details box just below the Description Box. If, after taking into consideration the information already reported on the K-1, you need to correct the basis reported on the Form 1099-B, you can do so by selecting “I need to add or fix info about this sale that’s on my Form 1099-B.”

This includes taking into consideration the ordinary gain you reported in the “Enter Sale Information” interview screen of the K-1.

The Adjusted Cost Basis in the Correction interview is just that – an Adjusted Cost Basis. It is NOT an adjustment to the basis reported in the 1099-B. If you need additional guidance on calculating the adjusted basis, pleas update this answer with a "Comment".

When these entries are made, everything will flow correctly to the Form 8949, Form 4797, Schedule D and Form 1040.

There will be two Form 8949s – one reporting the entire gain as shown on the 1099-B (STCG or LTCG), and the other backing out that gain as an adjustment (source was K-1 Ordinary Gain entry mentioned above).

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Anonymous

Deleted [Duplicate]

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Anonymous

Answer

Reporting Sale of publicly-traded limited partnerships

Steps to report the gain on sale of your publicly-traded limited partnerships:

1. Enter “0” (zero) in the Sale Price & Partnership Basis blocks of the K-1 “Enter Sale Information” interview screen. You can leave the Ordinary Gain Entry the same as reported on the K-1

"From the Schedule K-1 Partnership 2014 (Form 1065) Additional Information worksheet in the TurboTax program, Instructions on reporting Disposition of Partnership Interest:

If this is a full or partial disposition of a publicly traded partnership (PTP) or master limited partnership (MLP) that was reported to you on a Form 1099-B, enter a sales price of zero on line 5 and a basis of zero on line 7 below. Enter the 1099-B transaction on Schedule D, checking the appropriate "Reported on 1099-B" box A or B.

Line 5 Sales price (If box 1a(4) is checked, enter estate valuation.)

Line 7 Basis of partnership interest"

2. Enter the 1099-B as a Box A (or D) Transaction (Short term (or Long term) with cost basis reported to the IRS) and check the Add More or Edit) Details box just below the Description Box. If, after taking into consideration the information already reported on the K-1, you need to correct the basis reported on the Form 1099-B, you can do so by selecting “I need to add or fix info about this sale that’s on my Form 1099-B.”

This includes taking into consideration the ordinary gain you reported in the “Enter Sale Information” interview screen of the K-1.

The Adjusted Cost Basis in the Correction interview is just that – an Adjusted Cost Basis. It is NOT an adjustment to the basis reported in the 1099-B. If you need additional guidance on calculating the adjusted basis, pleas update this answer with a "Comment".

When these entries are made, everything will flow correctly to the Form 8949, Form 4797, Schedule D and Form 1040.

There will be two Form 8949s – one reporting the entire gain as shown on the 1099-B (STCG or LTCG), and the other backing out that gain as an adjustment (source was K-1 Ordinary Gain entry mentioned above).

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dlidema

Level 2

Need more help. First, do you mean that I adjust the basis reported on the 1099-B, using the info provided with the final K-1? Second, why are passive losses still carried over, even tho' I checked Final K-!? This was a complete disposition of the PTP

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monigen

Level 2

I received a separate form from an LP entitled Sales Schedule. with 10 boxes. box 8 goes into form 4797 part II line 10. How do I put that information into that box???

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gnb42town11

Level 2

1. This is a memo I typed for myself after finally figuring this out. I use Vanguard and thus you should susbstitute your broker's name when you see Vanguard. To enter capital gains/losses and ordinary recapture on the sale of partnership interests as reported on brokerage statements and K-1’s, follow the following instructions: [NOTE: This approach avoids entering totals received from the broker and then trying to figure out where basis adjustments etc. reported in the K-1 package go. Make each 1099-B broker statement an EXHIBIT to attach to the return which reflects the adjusted totals and enter the totals on the appropriate TurboTax input schedule as indicated below. Although the Exhibit may not be required, I always attach them. [Use the FORMS approach to enter the data outlined below NOT the EasyStep – which I’ve never used. As a retired CPA who specialized in taxes, I use the FORMS approach.] This is rather lengthy, I suggest you print it out.

2. FIRST STEP: Enter the K-1 data on the K-1 entry sheet. {Assuming ALL units are sold} - on the “Final/Amended” section at the end of Part II, click on the:

a. Final K-1 box

b. Partner sold or otherwise disposed of entire interest box….

c. Click on the QuickZoom button – then to Part II Disposition of Partnership Interest

i. Check boxes on 1a and 1a(1)

ii. Enter dates etc on Line 2,3&4.

iii. Enter “0”s on Selling Price and Basis, line 5 & 7, at the bottom of the schedule. Do not enter the actual data here.

3. SECOND STEP: Go to the schedules in each K-1 package from partnerships sold which show the adjustments to basis required, and the ordinary income portion etc.

a. Determine the number of units sold for Long-term and Short-term transactions respectively from the Vanguard statements of sales. Draw a line to separate the two categories. Add and note total L/T and S/T adjustments.

4. THIRD STEP: Make a copy of each Vanguard 1099-B schedule of “Proceeds from Broker and Barter Exchange Transactions” to become EXHIBITs to reflect the adjustments. Enter each adjustment for each partnership at the bottom of the schedule for the basis/gain/loss info shown in the 1099-B. The sum of each column is the adjusted amount to enter on the input sheets. The EXHIBITs will be attached to the return. There will generally be four (4) 1099-B’s to reflect:

a. L/T – Basis reported to IRS [Box 3] transactions

b. L/T – Noncovered securities - basis not reported to the IRS [Box 5]

c. S/T – Basis reported to IRS [Box 3] transactions

d. S/T – Noncovered securities - basis not reported to the IRS [Box 5]

i. The name for each one should contain the relevant description, e.g. “Taxpayer Name L/T Basis Reported…” etc which will make it easier to find each one in the left margin menu in FORMS mode.

5. FINAL STEP: The totals after adding/(subtracting) the adjustments determined on the above 4 schedules will be entered on two different TurboTax Schedules:

a. Use a separate CAPITAL GAIN (LOSS) TRANSACTION WORKSHEET for each of the categories listed above – creating 4 different transaction statements.

i. L/T – Basis reported to IRS [Box 3] transactions

ii. L/T – Noncovered securities not reported to the IRS [Box 5]

iii. S/T – Basis reported to IRS [Box 3] transactions

iv. S/T – Noncovered securities not reported to the IRS [Box 5]

On each one:

????????????v.?Complete the relevant info in Part I.

vi. On Part II,

??????????????1. Line 4 Company Name – enter SEE EXHIBIT “x”.

??????????????2. Lines 5c and d – VANGUARD and a/c number

vii. Part III – enter relevant info on lines 4 and 5

viii. Part IV – check boxes on lines 1, 2 and 5b

ix. Part X – this is where the key info is entered for sales price, cost etc. on lines 4 and 5. On line 7 “Total adjustment to gain (loss)” enter the Ordinary Gain as a negative number. [This ordinary piece will be entered as a positive amount on Form 4797 in the next step]. The adjusted gain should agree with the adjusted gain determined on the EXHIBIT.

??????????????1. Note on line 9 the codes can be determined by putting your cursor on the box and click on the HELP CENTER in upper right. Then click on “Form 8949 Adjustment Codes” in the popup box. Generally it should be BMO.

b. On Form 4797 Sales of Business Property input form, pg1, enter L/T and S/T ordinary income adjustment amounts on two separate lines:

i. Column (a) Description – enter the name of the EXHIBIT “x” -ORDINARY.

ii. Column (d) Sales Price – enter the ordinary amount. [no other info is required – only sales price.] These amounts will show up on the two parts of the Form 4797 which you select in the next steps.

iii. Column (h) indicates whether its short-term [goes in Part I] or long-term [goes in Part II].

iv. Column (i) – your selection is for Taxpayer or Spouse ownership.

c. This should complete the process. Review Schedule D and Form 4797 to see that the L/T, S/T capital gains on D and the L/T, S/T ordinary income totals are properly reflected and agree with the totals from the EXHIBITs above. If you followed the details above, they should! Good luck.

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gg33

Level 2

My K-1 details on PTP sale shows an "AMT gain/loss Adjustment". When entering info in the interview under the "AMT Gain or Loss" column do I apply this adjustment to the "Ordinary Gain" or to the "Partnership Basis" , or both , or what? Or is this not where the adjustment is entered?