received K-1 and 1099-B how to take of duplicate loss

[PAGB]

We received a 1099B and K-1 for the same sales.

K-1 only has info in  box 11C which is a loss

We have the option to generate our 8949 with another software (we attach it as a pdf to our return since it's pretty big) so we can adjust the cost basis of those transactions in the software.

My question is when I plug in the info of the K-1 into Turbotax under what condition will any of it  generate an 8949? I'm worried about having duplicate 8949 pages and would like to know how to avoid that.

On the K-1 box 5 and 8 and 13W are zero, box 11C is a negative number  and the rest are empty.

[Mike9241]

MLP reporting k-1 and 8949

Please follow these instructions. Incorrect entries can result in entering the sale twice or otherwise incorrectly. Also, see the sales schedule that was included with the k-1

Enter the k-1 info

Check the PTP box

If total disposition proceed as follows:

make sure to check final k-1 box and total disposition.

On the k-1 disposition section for sales price use the ordinary income (sometimes you’ll see a column with the “751” or the words ”gain subject to recapture as ordinary income”

Cost is zero

Ordinary income is the sales price.

The ordinary income flows to form 4797 line 10.

Now for the 8949.

The broker’s form is probably coded as B or E – sales proceeds but not cost basis reported to the IRS. This is because the broker does not track the tax basis. It used what you paid originally which is not correct.

The correct tax basis is:

What you paid originally, should be the same as what is on 8949,

Then there is a column on the sales schedule that says "cumulative adjustment to basis". If it’s positive add it to the original cost. If it’s negative subtract the amount.  

Finally, add the amount of ordinary income reported above.

The result is your corrected tax basis for form 8949.

Some other things. Look at lines 20Z1. That number should be added to the ordinary income above for reporting the 199A (qualified business income from the PTP). You don’t have to enter this but then you lose out on a tax deduction = 20% of this amount.

ignore boxes that are zero

enter 11c that a loss from section 1256 contracts that will carry to form 6781 and from there to schedule D

[PAGB]

@Mike9241 

Thank you very much. 

 IMLP  means Master Limited Partnership?

Mine is a PTP: Publicly Traded Partnership

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And what does " If total disposition " mean?  Do you mean if all the shares were sold last year?

On the Transaction Schedule Page, End of Year Shares is zero so I assume that means all the shares were sold.

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"On the k-1 disposition section for sales price use the ordinary income (sometimes you’ll see a column with the “751” or the words ”gain subject to recapture as ordinary income” )

Cost is zero

Ordinary income is the sales price.

The ordinary income flows to form 4797 line 10."

On my Sales Schedule page there is no column for " gain subject to recapture as ordinary income ".

I only have information for:

SHARES SOLD,    SALE DATE,   PURCHASE PRICE/INITIAL BASIS AMOUNT, 

CUMULATIVE ADJUSTMENTS TO BASIS,   COST BASIS,

So if I understand correctly I don't have to worry about this part.

[DianeW777]

It depends.  If you have the sale of the partnership already accounted for and the income from the K-1 for the year then you have reported both parts of your K-1 (income and sale).

Question: And what does " If total disposition " mean?  Do you mean if all the shares were sold last year?  

On the Transaction Schedule Page, End of Year Shares is zero so I assume that means all the shares were sold.

• Yes.  This would mean that you no longer have any investment, and you have total disposed of this activity.

The K-1 does report the income for the year and the sale is a separate entry.  Use your K-1 to enter your investment sale with the information you indicated (posted below) and be sure to use the information provided by our awesome Tax Champ @Mike9241 to calculate your cost basis (added again below for your convenience).

• SHARES SOLD,    SALE DATE,   PURCHASE PRICE/INITIAL BASIS AMOUNT, 

  CUMULATIVE ADJUSTMENTS TO BASIS,   COST BASIS

The correct tax basis is:

• What you paid originally, should be the same as what is on 8949,
• Then there is a column on the sales schedule that says "cumulative adjustment to basis". If it’s positive add it to the original cost.
• If it’s negative subtract the amount.  
• Finally, add the amount of ordinary income reported above.
• The result is your corrected tax basis for Form 8949.

[PAGB]

@DianeW777 

Thank you very much for answering.

A little background: We received the K-1 buying and selling stocks (ETF's)

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"It depends.  If you have the sale of the partnership already accounted for and the income from the K-1 for the year then you have reported both parts of your K-1 (income and sale)."

I'm sorry I'm a little confused which part of my question this answer is referring to?

"...sale of the partnership already accounted for"

I assume the answer is yes since everything was sold last year

"..... and the income for the K-1 for the year"

Yes I believe this is reported in Part II (partners info) subsection L current year net income (loss)

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"Yes.  This would mean that you no longer have any investment, and you have total disposed of this activity."

Would this mean on TT for this Question:

Describe Partnership Disposal:

-No entry
-Complete disposition
-Disposition was not via a sale
-Sold and am receiving payments

I would choose "Complete disposition" or "Disposition was not via a sale" because I'm reading conflicting

responses.

[DianeW777]

If you no longer own any interest in the publicly traded partnership (PTP), then you would have a complete disposition.  A 'Complete Disposition' will release ALL suspended losses, while 'Disposition not via a sale' may leave some in suspension.  This may or may not apply to your case. 

When you indicate this is the final K-1 -- 

• TurboTax will at some point ask for 'selling price' or some other terminology and this will be your final liquidating distribution.
• TurboTax will also ask about your tax basis and then enter this as well.
• I would expect the final K-1 to have a note regarding any Section 751. This would be your share of any ordinary income recapture on depreciation related to tangible assets.  If you do have this information, your overall gain will not change, just the character and how to show this on the return.

[PAGB]

@DianeW777 

Thank you. Yes I believe we don't own any interest in the PTP any longer since all the stocks were sold last year.

I called the them and they also confirmed this.

"I would expect the final K-1 to have a note regarding any Section 751. This would be your share of any ordinary income recapture on depreciation related to tangible assets.  If you do have this information, your overall gain will not change, just the character and how to show this on the return."

On our Sales Schedule there is no section 751 or anything titled "gain subject to recapture as ordinary income" that I can see. Maybe because they are ETF's (exchange traded funds) ? ETF's wouldn't be considered tangible assets, I don't think?

[DianeW777]

Yes, you are correct.  They are not a tangible asset and would not have ordinary income recapture since they are not eligible for depreciation expense.

[f6b1980c6221]

Hi,

How would I answer the TT interview for final k-1?

If this is reported on my 1099B:

Proceed= $1169

Cost Basis= $625

On the K-1:

Average Purchase Price/Initial Basis = 625

Cumulative Adjustments to Basis = -57

Average Cost Basis i= 598

Gain Subject to Recapture as Ordinary Income i= 183

AMT Gain/Loss Adjustment = -1

How would I answer the TT interview for final k-1 sale?

Sale  Price

Selling Expense

Partnership Basis  Regular Gain or Loss

                                 AMT Gain or Loss

Ordinary Gain       Regular Gain or Loss

                                AMT Gain or Loss

1250 Gain             Regular Gain or Loss

                                AMT Gain or Loss

[JamesG1]

Only report the sale once.  The sale can be reported through the K-1 screens or through IRS form 1099-B entries.

If you report the Proceed=$1,169 and Cost Basis=$625 on an IRS form 1099-B, the sale will be reported on Schedule 8949 Sales and other dispositions of Capital Assets / Schedule D Capital Gains and Losses.

Therefore, within the K-1 entries,

• at the screen Describe the Partnership, select This partnership ended in 2022, and 
• at the screen Describe Partnership Disposal, select No entry.

Be aware that if:

• At the screen Describe the Partnership, you report Disposed of a portion of my interest.... and
• At the screen Tell Us About Your Sale you report Sold Partnership Interest,

you will be asked to provide information about the sale of the investment and the sale would be reported.  In this case, you would not report the sale on IRS Form 1099-B Proceeds.

Make sure that the sale is not reported twice.  Review the sale of the investment reported on IRS Form 8949 Sales and Other Dispositions of Capital Assets and IRS Form 1040 Schedule D Capital Gains and Losses.

You are able to view the entries at Tax Tools / Print Center / Print, save or preview this year's return.

@f6b1980c6221