K-1 Line 13K requires Form 8990 unless exempted

[wjschermer]

I am looking for an opinion as to whether I am exempted from filing form 8990 based on the nature of the partnership business. I received a Schedule K-1 from Energy Transfer (ET). It reports a number on line 13K "Excess Business Expense". Turbotax advises that I may need to file a form 8990. The form instructions provide an exemption from filing for "certain regulated utility businesses", defined to include "Gas or steam through a local distribution system; or Transportation of gas or steam by pipeline".  ET describes itself as: "Energy Transfer LP (NYSE: ET) owns and operates one of the largest and most diversified portfolios of energy assets in the United States, with more than 130,000 miles of pipeline and associated energy infrastructure." Does anyone have an opinion whether I am exempted from filing form 8990?

[Mike9241]

My opinion is you don't qualify for the exemption

From what I understand ET is not a regulated utility business. you can contact customer relations to see if thy have anything to say about this 

*****Business Summary
Energy Transfer LP, together with its subsidiaries, provides energy-related services in the United States. It operates through Intrastate Transportation and Storage; Interstate Transportation and Storage; Midstream; Natural Gas Liquid (NGL) and Refined Products Transportation and Services; Crude Oil Transportation and Services; Investment in Sunoco LP; Investment in USA Compression Partners, LP (USAC); and All Other segments. The company owns and operates natural gas transportation pipelines and storage facilities; and approximately 12,200 miles of intrastate natural gas transportation pipelines and 20,090 miles of interstate natural gas pipelines. It also sells natural gas to electric utilities, independent power plants, local distribution and other marketing companies, and industrial end-users. In addition, the company owns and operates natural gas gathering pipelines, processing plants, and treating and conditioning facilities; and natural gas gathering, oil pipeline, and oil stabilization facilities. Further, it owns 5,700 miles of NGL pipelines; NGL fractionation and storage facilities; and other NGL storage assets and terminals. Additionally, the company provides crude oil transportation, terminalling, acquisition, and marketing activities; owns and operates approximately 17,950 miles of crude oil trunk and gathering pipelines; and sells and distributes motor fuels and other petroleum products under the Sunoco and EcoMaxx brands. It also offers natural gas compression; wholesale power trading; and carbon dioxide and hydrogen sulfide removal services, as well as manages coal and natural resources properties; sells standing timber; leases coal-related infrastructure facilities; and collects oil and gas royalties. The company was formerly known as Energy Transfer Equity, L.P. and changed its name to Energy Transfer LP in October 2018. Energy Transfer LP was founded in 1996 and is headquartered in Dallas, Texas.

Website
energytransfer.com

[Ciao4]

I also am a partner in Energy Transfer LP.

Does This Mean we have to attach Form 8990?

If I call Energy Transfer what exactly do I ask them?

[SamLin]

from k1 page 12 . I think we are so f. I should close ET in 2022. :(

Line 13K - Excess Business Interest Expense (EBIE):
This amount represents your share of EBIE. Report this amount on Form 8990,
Schedule A. If you were allocated EBIE this year or in previous years and you sell
any of your units, you may need to adjust your basis by your cumulative deferred
EBIE. If you are allocated excess taxable income on Schedule K-1, Line 20AE in a
future year, you may be able to recover the EBIE previously reported to you as a
deduction in the year you receive excess taxable income. For additional guidance,
please consult your tax advisor

[SamLin]

also just curious, did you close ET in 2023? I didn't see this in 2022.

Based on this https://ttlc.intuit.com/community/business-taxes/discussion/i-have-excess-business-interest-expense-...

I think this is for deducting my tax. So if I don't care about the duduction. I guess omitting it is not a big deal. However, there is a chance that IRS might hunt me down and tell me I paid too much tax and ask me to submit 8990...

[Ciao4]

SamLin,

Your response was helpful.

In my case, a family member purchased a small amount of Energy Transfer LP in October 2024.

The family member sold Energy Transfer LP in March 2025 because of this nonsense.

I read somewhere that something did change around 2021 or 2022 and think it may have something to do with Form 8990 and Section 163(j).  Maybe this info might help you to investigate further. My knowledge is limited and I can't explain further.

I called TurboTax for help entering the Box 20 info.  The letter code selections are limited and you can only choose code ZZ for the rest.  I had 8 entries with codes ZZ.  Two slides later it seemed I had to reenter those 8 entries, because TT said these items may need to be place elsewhere in the tax return.

However, my TT rep, who said he was a new employee, said anything with a ZZ was not needed and was just for informational purposes.  So, why did the screen say the info may need to be placed elsewhere in the return?

The rep also said Form 8990 was only for Businesses not for Individual Tax Returns. Who knows?

In my mind TurboTax is not as good as it once was.

I now have a tax professional doing the return. 

As far as the IRS hunting you down as you explained in your prior post, who is left working at the IRS to care if you paid too much tax and hunt you down? But I do understand and agree with you.

[SamLin]

I think " ZZ was not needed and was just for informational purposes" is true. I still put those information in tho. I have done that for 3 years now. 8990  is the new thing from this year. But I happened to close my position as well, so I don't know if this is only happens becasuse of me selling all my position or something new.

Anyway, there are more complication when you close it. Now TT is asking about total sell price / partnetship basis etc. If I have a chance to do this all over, I will just buy ETF version of this. 

For you, you should try to keep all the transaction documents for ET, you will need it to prove all your unit are sold etc

[StanOrel]

I’m actually still trying to figure this out. I had bought a really small number of shares of ET that the number in 13K is a “1”. Does it mean $1 ? Is there any point for me to file Form 8990? And what information do I use to fill the rest of that form, because I have no idea what Tentative Taxable Income from Line 6 means on that 8990 form…

[Mike9241]

yes $1. the easiest thing to do would be to omit line 13K. Turbotax does not support the form which means if you have that $1, you won't be able to e-file You would have to manually complete the 8990 and enter the $1 if deductible, on the appropriate form and then mail in your return with the 8990.  The mailing costs would negate any tax savings from that $1. 

[Ciao4]

Hi Stan Orel,

The number in 13K is $1.

My number in 13K is $2.

So, I also have a small number of shares.

I am having a tax professional prepare my return. I may have it back today or tomorrow.

I can share with you if Form 8990 is included and what fields are populated, if you like.

I do know you have to fill in Schedule A before you can fill in Part I on Form 8990.

You can watch this video:

https://www.youtube.com/watch?v=wCIfsWaaHEo

Here is an article also from the author of the video with written instructions.

https://www.teachmepersonalfinance.com/irs-form-8990-instructions/

I wish TurboTax would make instructional videos on tax topics like this.

[StanOrel]

Oh, thank you, Ciao4!  Keep me posted about that! That would be really helpful! TurboTax says it helps input your information but once it gets complicated I end up having to look into different forms, myself, trying to learn what they are for and how to fill them out. It can get kind of stressful. This Form 8990 is a big headache but I would definitely want to figure out if it's actually needed and how to fill out. I should use youtube more often too! The video and link are really helpful!

[StanOrel]

@ Mike9241

Ohh, is the number put in 13k used as a deductible to help with our taxes?

If it just cancels that $1 I guess there's not really a point. Thanks for your input!

[Ciao4]

Hi StanOrel,

I got the return back from the accountant.

He did not fill out Form 8990.

However, He filled out Schedule E Supplemental Income and Loss AND Form 8582 Passive Activity Loss Limitation.

I am in the process of asking the accountant why he chose those forms.

Hopefully this guy knows what he is doing. 

Maybe Mike 9241 can shed some light.

[Ciao4]

StanOrel

These are the forms my accountant filled out

 Schedule 1, Schedule E and Form 8582.

I still did not get an answer from him as to why he did not fill out Form 8990.

My numbers on K-1 are very small $2 and no Foreign taxes paid.

I am so lost!

[Ciao4]

StanOrel,

Here is another video, but first read the comment section.  It may help you.

https://www.youtube.com/watch?v=LWL8xSfURqw