Selling MLP Shares

Forum|Forum|4 years ago
April 6, 2022
2 replies
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I sold all of my Energy Transfer shares last year. Am I still required to enter all of the K1 data,

HelenC12

Level 15

If you reported the MLP shares on your 2020 (last year) income tax return (the final K-1) and you don't have anything to enter on your 2021 income tax return, delete the K-1.

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des779Author

Level 2

I sold them in 2021 and received the Final K1 a couple of weeks ago.

HelenC12

Level 15

Yes, you're required to enter all your K-1 data in TurboTax. Make sure you check the box that reads "Final" otherwise the K-1 information will transfer to your 2022 income tax return.

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nexchap

Level 9

Not only do you need to enter all the K-1 data (probably broken into 4-5 K-1s, since ET reports 3 different entities and a couple have box 1 and 2 income), but you need to be careful in how you handle the sale info:

- The K-1 interview will have a screen to enter the sale data, but that can result in double-counting the cap gain. You want to only use this screen for handling the Ordinary Income reported on the Sales Schedule ("Gain subject to recapture....").

- The cap gain gets handled on the 1099-B interview. But you have to adjust the cost basis on that screen.

There's more detail, and a ton of examples, in this thread: https://ttlc.intuit.com/community/investments-and-rental-properties/discussion/how-i-report-the-sale-of-mlp-shares-in-turbo-tax-i-sold-all-shares/00/776624

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des779Author

Level 2

Thank you! On the sales worksheet their is a column labeled "Gain Subject to Recapture As Ordinary Income" which in my case is $60,000+. Is this the accumulated depreciation that I now have to pay ordinary income tax on? Does anything offset this? thanks.

nexchap

Level 9

@des779 Your suspended losses will be released to Sched E, and these will largely offset the $60k. Also, when you adjust your cost basis, the Ord Income reduces any Cap Gain. Your cost basis is [purchase price]+[cumulative adjustments]+[ord income]

**Say "Thanks" by clicking the thumb icon in a post. **Note also, I'm not a Tax Preparer/CPA. Just a volunteer, seasoned, TurboTax user. . Use any advice accordingly!