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Level 2
posted Apr 14, 2024 4:56:54 AM

Multiple purchase dates for sale of K-1 units

I sold units of a publicly-traded partnership. I purchased the units on multiple dates with outright purchases and with reinvestment of distributions. Some of the gains/losses will be short-term, some long-term. How do I enter the different purchase dates with different costs?

0 3 2665
3 Replies
Level 9
Apr 14, 2024 9:47:16 AM

Don't use the K-1 interview for the Cap Gain/Loss calculations:

  1. Use the K-1 interview for the 'ordinary gain' portion of the PTP sale, but not the capital gain/loss.  Do this by: 1) enter 0 for sales proceeds, 2) enter the ordinary gain numbers provided on the K-1.  Note that there will be two ordinary gain numbers, one for Regular and one for AMT, and 3) set your basis as the inverse of the ordinary gain (for example, if ordinary gain was 100 (regular) and 90 (AMT), set basis as -100 (regular) and -90 (AMT).  Doing this puts the ordinary gain into all the right spots on your tax return, but sets the capital gain/loss as $0 for both Regular and AMT.
  2. Go the the 1099-B provided by your broker.  There will be a cost they provide, which usually isn't reported to the IRS and is incorrect since they don't see the K-1s.  This can be changed, so change it to whatever provides the correct cap gain/loss (you work out the cap gain/loss by using the sales schedule provided with your K-1).

Level 2
Apr 14, 2024 12:29:49 PM

Thank you for your help. I have a few follow-up questions below for clarification about entries in the K-1 questions.

1. Even though I made a few outright purchases and reinvested distributions, I make the purchase of date the first date I purchased any units?

2. I enter $0 as the sales proceeds and partnership basis for regular and AMT taxes? IN doing that, the "Review of Investment Gain/Loss on Sales" shows $0 short-term $0 long-term gain/losses.

3. The gain/loss on the sale and short-term/long-term amounts will be correct by adjusting the amounts on the broker statements by the items in the K-1 sales schedule?

4. The sales schedule has $0 sales proceeds for Form 8949, column D. Do I find this amount on the broker statement and then add it to Form 8949?

5. How get the ordinary gain and 1250 gain when they are not listed on Part III nor on the sales schedule?

6. How do I used these two statements to Box 20 of Part III:

 - "Partnership Interest Disposition of gain/loss adjustment for Section 163(j)?

 - "partnership Basis Items and Remedial Items for Section 163(j)?

 

Level 9
Apr 14, 2024 12:50:52 PM

1) Doesn't matter.  You can use 'various', but this info won't be used.

2) Yes, if you don't have Ord Income to report (you may not).

3) Yes

4) Not sure what Form 8949 you're referring to.  If you've done '2' correctly, the only ones you have should be from your broker.

5) You may not have any.  It would be on the sales schedule if you did.  Also sometimes on line 20AB

6) Line 20 is full of special items that pertain to some but not all.  If you're subject to 163(j) (unlikely if you're just an average retail investor, but you should read up on it) then you'd adjust your return to reflect those values.