K1 & 1099B

[momfish]

We sold a PTP that we had held for years.  The sale involved some long-term and short-term transactions.  We received both a K1 from the partnership and a 1099B from our broker.  I am totally confused about how to enter this.  There is also a "worksheet" on the back of the K1 that has steps for calculating total gain/loss and capital gain/loss and what percent is long term, but I am quite confused about how this all goes into TT. 

[ThomasM125]

You need to report the K-1 form in TurboTax as it is stated, like you normally would. 

Then, determine your gain or loss on sale of the partnership interest. This will be what you received for your shares less your basis in the investment. Your basis is basically what you paid for your interest plus/minus income and losses you reported on your tax return over the years. You can use the worksheet you mention to help with that.

You should receive a form 1099-B reporting the sale of your partnership shares. Enter that as an investment sale in TurboTax and adjust the cost basis to reflect your capital gain as calculated above. Also, make sure you don't duplicate any capital gain that is reported on the K-1 entry.

You enter the investment sale (form 1099-B) as follows in TurboTax:

1. Income and expenses
2. Investment Income
3. Stocks, Mutual Funds, Bonds, Other

[nexchap · Accepted solution]

This is an area that has spawned a lot of confusion, and a lot of Q&A.  Here's a thread that can hopefully clear up most questions (its written for MLPs, which always have Ordinary Gains, but applies to any PTP):  https://ttlc.intuit.com/community/investments-and-rental-properties/discussion/how-i-report-the-sale...

[Mike9241]

the k-1 numbers get entered on the k-1 input.

that "worksheet" (supplemental sales schedule) may have a column labeled gain subject to recapture as ordinary income - report on 4797 Part II line 10 

then a screen "describe the partnership" appears. 

this is a publicly-traded partnership - check this box if the box in Part 1 box c of the k-1 is checked.

check the box if a foreign partnership

check the box for this partnership ended in 2020

then click on continue

next screen "describe partnership disposal"

check the box "complete disposition"

next screen "tell us about your sale"

check sold the partnership interest

next screen dates.

use the earliest purchase date and the date of the sale

next screen will ask for sales info. since the sale is reported on the 1099-B this is not the place to enter the sale only the amount that's in the column on the worksheet for ordinary gain

sales price = ordinary gain

selling expenses  = 0

partnership basis = 0

ordinary gain = sales price - this is what should show up on form 4797 part II line 10

1250 gain = 0 

now we have to fix the 1099'-B worksheet reporting because the broker reports your original cost, not the correct tax basis. there should be a cost basis column.  this needs to be split between short-term and long-term based on the %'s given for long-term/short-term. you change what the broker reported as costs to these numbers (ie for those shares held short term and those shares held long-term).

similarly, the amount in the ordinary income column needs to be split by these %'s and the amounts entered as a negative number in the boxes for adjustment amount use code O

.

[Tom175]

Best advice I found, especially if you are dealing with long term gains/losses.  Thank you  Tom