topic Sale of an MLP in Business & farm

Sale of an MLP

fsab — Sat, 11 Apr 2020 13:50:58 GMT

I am trying to figure how to report the sale of an MLP. My original cost was 130,000. Adjusted basis over the 4 years I owned it as reported on the K1 is 97,000 total proceeds from the sale is 100,000. Do I report the diff between proceeds and adjusted basis as ordinary income and how do I enter the K1 information in turbo tax?

Re: Sale of an MLP

DianeC958 — Sun, 12 Apr 2020 15:42:00 GMT

To report the K-1 in TurboTax, you go to

Wages & Income
Business Items
Schedule K-1

As you go through the screens, TurboTax you will see a screen titled Describe the Partnership, pick the 4th option, Disposed of a portion of my interest in the partnership during 2019.

The next screen asks you more information about the sale.

You report the date you originally purchased your interest and the date you sold your interest.

Then the program asks about the sales price and other information to do with the sale.

The difference between your basis in the partnership and the amount you sold it for is Long Term Capital Gain/Loss, if you held the investment for more than 1 year, or Short Term Capital Gain/Loss if you held the investment less than 1 year.

@fsab

Re: Sale of an MLP

nexchap — Tue, 14 Apr 2020 18:18:05 GMT

@fsab -- Don't enter the sales proceeds into the K-1 interview.

Here's a long thread on how to correctly enter the info into TT: https://ttlc.intuit.com/community/investments-and-rental-properties/discussion/how-i-report-the-sale-of-mlp-shares-in-turbo-tax-i-sold-all-shares/01/776624

There's lots of info and examples in the comments as well.

But as a starting point, here's the instructions that TT provides if you right-click the Sales Price box and pull up "About Part II, line 5":

"NOTE: If this is a disposition of a publicly traded partnership (PTP) or a master limited partnership (MLP) that was reported on a Form 1099-B, enter zero for both the sales price and the basis on lines 5 and 7 here and report the sale as normal on Schedule D, checking the appropriate "Reported on 1099-B" Box A or Box B. By reporting the sale of the PTP or MLP on Schedule D and entering zero as the sales price and basis on this K-1 Worksheet, the disposition will get processed correctly throughout the return."

Unfortunately, the above only works when handling a complete disposition that was entirely short or long term. For partial dispositions, or mixed long/short, you've got to go with the info on the thread above.