FINAL K1

[nono4taxes]

I have limited partnership in Energy Transfer and received both a Final K1 and a second regular K1.  When I contacted tax support of the company she told me the reason I received two K1s was because we transferred the shares from an Ameritrade joint account to a Schwab trust account.  This generated the two K1s since they were different types of accounts.  I asked if I had to report a sale of my 200 shares from Ameritrade since it is marked "Final K1" but she said no because it was considered a transfer not a sale.  (Ameritrade did not list it as a sale on my 1099B).  But when putting the final K1 info into TT won't they consider it a sale since it is marked FINAL????  Or would I check disposition was not via a sale.  I would appreciate any help on this matter as not sure how to handle the Final K1.  Thank you

[jtax]

In this situation I have seen other people in these discussion groups decide to enter only 1 K-1, not marked as final, with the sum of each of the k-1s. There is a belief that the totals are what the IRS will be looking for and that feels right. If the IRS is even verifying K-1 amounts. Who knows?

If you do otherwise, you may lose important history for the "final k-1" that is carried forward each year and may only be used when the partnership interest is sold or the partnership otherwise ends. Typically these are passive activity loss (PAL) carry forwards. Or worse you may claim the suspended PAL in the current year, even though you didn't fully dispose of your interest and offset other income.

The advice about these not being a sale feels correct to me. The only thing that gives me pause is going from a joint to a trust account. If 2 people own it in the joint account and then 1 person's trust owns it after the transfer, I wonder. If the trust is a joint trust (man how I hate those, often times very confusing what happens to which assets after the first to die) with the same settlors as joint account owners, that seems more clear.