Need help entering K-1 information

[mellynlee]

We sold some stock in a company that generated a Final K-1.

I entered the following info into TT:

This is a publicly traded partnership AND This partnership ended in 2024.

I chose: 'Complete disposition' (for how I disposed of this partnership)

I chose: 'Sold Partnership Interest' (for what type of disposition)

Are the above choices correct?

The next section asks for the following info on 'Regular Gain or Loss':

Sale Price: Do I get this number from the brokerage account, as the NET GROSS sale amount of the stock?

Selling Expense: ?

Partnership Basis: ?

Ordinary Gain: ?

1250 Gain: ?

And it asks for the following info on 'AMT Gain or Loss':

Partnership Basis

Ordinary Gain

1250 Gain

I was sent a lot of information along with the K-1, including a 'diagram' on where to put the information of the K-1 onto 8 different forms!! However, this doesn't help me much going through the TT interview.

I hope this is OK -- I am enclosing a couple of photos below - of my K-1, and a 'Sales Schedule' that has a lot of pertinent numbers (I think).

Can someone help me answer the above questions? OR, if you think it's easier to try and follow their directions on filling out the 8 different forms, is that possible to do using the 'Forms' section of Turbotax?

Thank you!

K-1Sales Schedule

[PatriciaV]

Accurately reporting PTP/MLP income and transactions in TurboTax involves several steps:

Step 1: Gather your tax documents:

• Form 1099-B: Reports the sale of stocks, bonds, mutual funds, and other securities.
• Schedule K-1 from the PTP/MLP.
• Supplemental information provided by the PTP/MLP detailing income recapture (included with K-1).

Step 2: Entering Schedule K-1 Information

TurboTax Online:

• Log in and open or continue your return.
• Go to K-1.
• On the Schedules K-1 or Q page, select Yes.
• On the Did you receive any Schedules K-1? page, select Yes.
• Select Start next to the type of Schedule K-1 form you have (Form 1065 for partnerships), and enter/review your information.

TurboTax Desktop:

• Open TurboTax and continue your return.
• Select Search Topics. Search for and select K-1.
• On the Schedules K-1 and Schedule Q screen, select Yes.
• Select Start next to the type of Schedule K-1 form you have (Form 1065 for partnerships), and enter/review your information.

Enter PTP/MLP Details:

• Confirm/Enter the partnership's Employer Identification Number (EIN) and other relevant information as shown on your Schedule K-1
• Check the box for “This partnership ended in 20XX.”
• Choose “Complete disposition” or "Disposed of a portion..."
• Choose “Sold Partnership Interest.”
• Enter original purchase and sale dates.
• Enter Sales information from Schedule K-1 Supplemental Information.
  Note: Since you received a 1099-B for this transaction, it's important to make sure $0 of Capital Gain is reported on the K-1, as follows:
  • Sale Price = zero
  • Partnership Basis = amount of ordinary gain from Supplemental Info multiplied by -1 (ie: reverse the sign).
  • AMT Basis = amount of ordinary gain for AMT from Supplemental Info multiplied by -1 (ie: reverse the sign).
  • Ordinary Gain = gain/loss per Supplemental Info.
• On the screen "Review Investment Gain or Loss on Sale," verify that this screen reports all zeroes. This is the expected outcome if your entries are correct.

Input Income and Deductions:

• Enter amounts from each box on your Schedule K-1.
  • Box 1: Ordinary business income/loss.
  • Box 20 (Code 2): Section 199A information.
  • Box 20 (Code AB): Section 751 gain/loss
  • Passive Loss Carryovers as negative numbers (regular, AMT, QBI).

Step 3: Entering Form 1099-B:

• Navigate to the 1099-B section:
  • TurboTax Online/Mobile: Go to 1099-B.
  • TurboTax Desktop: Search for 1099-B and select the Jump to link.
• Follow the onscreen instructions. When you reach "Let's import your tax info," choose how you want to enter your 1099-B:
  • To import your form: Select your brokerage or financial institution from the list. Enter your sign-in credentials for your account, then select "Get my form."
  • To enter your 1099-B manually (recommended): Select "Enter a different way," then select your investment type on the next screen.
• On the following screens, answer the questions about your 1099-B. When you reach the "Review your sales" screen, the form you just imported should be listed.
  • Otherwise, to add another 1099-B, select "Add investments." 
  • Select "Continue."
• Enter the details from your Form 1099-B (separate long-term and short-term):
  • Note: If the K-1 Supplemental Information has separate long-term and short-term sales, allocate the 1099-B information between the two, using the percentages provided on the K-1 Supplemental Info.
  • Long-term/Short-term basis not reported.
  • What investment did you sell [Stock (non-employee)]
  • Description: "Sale of [PTP/MLP Name] Units."
  • Date acquired & sold.
  • Proceeds from sale: (portion for this section, if allocating).
  • Cost basis:
    From K-1 Supplemental Info: Original Cost plus/minus Cumulative basis adjustments plus/minus Ordinary Gain/Loss from Section 751.
  • Example:
    • Original Cost = $100,000
    • Cumulative adjustment to basis = ($20,000)
    • Ordinary Gain = 15,000
    • Adjusted Cost Basis to enter = 100,000 - 20,000 + 15,000 = $95,000
  • No special situations.
  • Result should equal Capital Gain/Loss from K-1 Supplemental Info.
  • Add another sale for short-term, if allocating

TurboTax will report the capital gain or loss on Schedule D (Part I - Short-term; Part II Long-term) and ordinary income on Form 4797 Part II Line 10.

[mellynlee]

Thank you so much for your response.

However, I actually reposted this question a couple of days ago, hoping to get a response since I hadn't heard from anyone. I posted it here:

https://ttlc.intuit.com/community/taxes/discussion/re-help-filling-out-sale-information-for-final-k-... 

It's quite lengthy as I have been going back and forth with another Community Tax Expert. It sounds like both of you are saying the same thing, I think:

Since I received both a 1099 and a K-1 for the sale of this stock, I need to report the transactions on both, but need to zero it out on one of them so it isn't reported twice? He was saying I would report it on the K-1, but zero it out on the 1099-B form. (That is where our discussion left off, as I am not sure how I would do that.)

You are saying to "zero it out" on the K-1, since it's already reported on my 1099?

If so, is it easier for me to do it your way? I don't know if it's easy for you to take a look at the discussion in the link above, and explain what I would need to do... I can "redo" the K-1 forms if it is easier.

Thank you!

[PatriciaV · Accepted solution]

The steps posted previously have been tested and are designed to produce an accurate outcome for the sale of a PTP/MLP interest using TurboTax.

The K-1 entry will report the ordinary gain/loss. Form 1099-B will report the capital gain/loss for the sale.

As long as your return doesn't report these gains/losses twice, you can use whichever method you choose.

[hqat1]

Hi,

I have a similar case of final schedule k-1, the real estate property was sold and partnership dissolved. I don't have 1099-B or a supplemental k-1 information. How do I calculate and enter the sale price, partnership basis, ordinary gain and 1250 gain? There are a lot of information in the sheet but nothing clearly identified. I have partner basis worksheet that I attached below.

[Mike9241]

based on the k-1 there is no gain or loss on the termination of the partnership. the 1250 gain is a subset of the 1231 gain. that's why it neither affects basis or taxable income

others might say to use the distribution as your sales price on the partnership sales schedule but then your basis would be the same amount for no gain or loss. 

	basis	income/(loss)	other
boy	15844
k-1 line
2	333	333
5	16	16
8	-291	-291
9a	-737	-737
9c			2456
10	8020	8020
18c	-4	-4
19a	-4605
subtotal	18576
liability reduction	-18576
	0	7337	2456

[hqat1]

Thank you for the quick reply, I am not sure I follow. I think you are suggesting I put 

sale price : 0

Partnership Basis: 0

Ordinary Gain : ? 

1250 gain: 2456

Is ordinary gain different from income in the table you put? or put the amount of income as ordinary gain?

[Mike9241]

ordinary gain is different from 1250 gain. 1250 gain is depreciation recapture on real property that can be taxed as a special rate while ordinary gain is taxed as whatever tax bracket it happens to fall in.  as previously stated, 1250 gain, a subpart of 1231 gain (long term capital gain), is taxed at whatever tax bracket you're in or 25% whichever is lower. 

so in some case it makes no difference. 

line 20AB section 751 ordinary income/gain looks like it would be zero because it affects basis and isn't showing up in your basis schedule. 

you don't report the 1250 gain in the sales schedule. only on line 9c

the basis worksheet you got shows you had zero basis at the end of the year. 

in short on the sales schedule just enter 0 as sales price and 0 as basis. that's it

[hqat1]

Thank you Mike. So basically all the fields end up being 0