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Level 4

MLP Reporting

It is so hard to get information on how to report MLP on a K-1, it seems someone would write a simple article on it.

  

From what I understand you cannot report losses from the K-1 until you sell the MLP.  I have an MLP and for Box 11C it has ($104) and for Box 11F is has $797. 

 

My question is can I use the $104 loss and any other losses on the K-1 to offset the $797 or do all those losses just go to the basis? 

1 Comment
Level 4

MLP Reporting

Hello bilskro,

I see you wrote this last year and not sure if you're still using TT this year. I've had MLPs for about 5 years and every year I feel like I read a little more and get a little more familiar with the language: Passive activities, At risk activities, etc...  Early on, I just leaned really heavily on the software to put all this stuff in the right place and lived the next 3 months in fear that I was going to get a nasty letter from the IRS. The various sections of the IRS documents that discuss PTPs (Publicly Traded Partnerships), repeat many of the same non-helpful instructions without really getting down to the nitty gritty and SHOWING YOU HOW TO  REPORT THEM! I don't know why TT hasn't done more either. 

Further, some of the information from the General Partners are also misleading. On the back of every K-1 that I get from the 3 MLPs I own, there is misinformation in the places where it says to report K-1 information, as follows:

 

Line 5: Interest Income should not be reported on Form 1040, line 2b as described. It should be reported on line 8a of 1040. Before reporting it on line 8a, the instruction should be to transfer the number to line 2 of Schedule B. This is where INTEREST INCOME goes when TurboTax "does" your taxes. Then it is summed with all the other Interest Income from other sources and FINALLY reported on line 8a of 1040.

 

Line 6a and 6b: Ordinary dividends and Qualified dividends should not be reported on line 3b and 3a of Form 1040 as described. These should be reported on line 5 of Schedule B and summed with other dividends which eventually are transferred to line 9a and 9b of your 1040. 

 

Not sure I've ever had items for both 11C and 11F.  Did you ever get an answer to your question? Would love to work with someone to co-write a blog on MLP taxation.  I think most accountants are afraid of someone writing one since it's probably a huge revenue stream for many.