Sale of Boardwalk Pipeline shows an adj. of cost basis of -596 . Does that adj. increase my cost basis or decrease it.
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New Member

Sale of Boardwalk Pipeline shows an adj. of cost basis of -596 . Does that adj. increase my cost basis or decrease it.

Supplemental sales report on K-1 shows a negative adj. to basis .It says to add it to basis. Does it increase my basis or decrease it.

4 Replies
Level 6

Sale of Boardwalk Pipeline shows an adj. of cost basis of -596 . Does that adj. increase my cost basis or decrease it.

Your basis starts at your initial cost, but can then go up or down depending on the PTP's financials.  Generally, your adjusted basis is going to be the sum of your purchase cost plus whatever the adjustments are on the Sales Schedule.  So in your case, your basis would drop by 576.

You can verify this by double-checking the specific instructions on your Sales Schedule.  There's probably language there that specifically states whether to add or subtract the value they provide.

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New Member

Sale of Boardwalk Pipeline shows an adj. of cost basis of -596 . Does that adj. increase my cost basis or decrease it.

Hi. I had a negative adjusted basis on a different PTP. But first..

Disclaimer: Not an accountant, attorney, tax preparer, IRS Agent, etc. The following is for entertainment purposes only. Use at your own risk.

Bottom line: the negative adjustment will decrease your basis. If your sale proceeds are $300 and your adjusted basis is $-100 your net proceeds will be $400. In my case, there was a K-1, Part III, Box 11, Code C loss (Section 1256 Contracts) which flowed to Form 6781 and Schedule D and "offset" the "false gain" resulting from the adjusted negative basis. In my case, the final calculations were in line with the loss calculated from Brokerage information alone. Turbotax will calculate things correctly.

Now, how do you enter the negative basis? See my post here: https://ttlc.intuit.com/questions/3735239-negative-basis-on-sale-of-ptp-reported-from-broker-on-1099...

Also note that you may not have to enter a negative basis if you have multiple sales of the same PTP (same Brokerage) that cumulatively yield a positive basis (e.g. Sale 1 Basis= -100, Sale 2 Basis=300, Total Basis = 200). The Sales Schedule of my PTP (ProShares) includes the following language:

"IRS Revenue Ruling 84-53 provides that a partner has a single unified basis in their partnership interest (emphasis added). If you acquired your partnership interest through various purchases, each row on the schedule above includes a prorated amount of each acquisition reflecting the unified basis of the disposed partnership interest."

I took this to mean that I could aggregate the sales and report them as a single transaction on Form 8949. In FORMS, I modified the 1099-B worksheet and used "Various" as the acquisition date, and date of the last sale as the sale date. They were all short term transactions. The basis, proceeds and gain/loss results of the aggregated transactions are, of course, identical to the totals from single transactions so I think/hope the IRS computers will be happy. If they're not, I have documentation indicating that all is in order. Good luck!

New Member

Sale of Boardwalk Pipeline shows an adj. of cost basis of -596 . Does that adj. increase my cost basis or decrease it.

I agree with nexchap's answer. The instructions on my Sales Schedule don't say "whether to add or subtract the value they provide". They say:

"Column 6: This amount is the sum (emphasis added) of Columns 4 & 5 (Purchase Price and Cumulative Adjustments) and represents your estimated outside basis...in the disposed partnership interest."

The key word is "sum". Find the sum by adding the string of signed numbers. For example, with Initial Basis= $2000 and Adjustment= $-596 you will have: +2000 plus {-596}  equals +1404. Technically speaking, your adding a negative number, not subtracting. I used words instead of + and = since Turbotax thought the expression was an account number (LOL).

My Sales Schedule had this calculation and the Final Adjusted Basis ("outside basis") on it. Your's may too. This is the basis you report to the IRS. Your initial purchase price is history. If your final basis is negative, see my answer below on how to handle it. Good luck!


New Member

Sale of Boardwalk Pipeline shows an adj. of cost basis of -596 . Does that adj. increase my cost basis or decrease it.

I agree with nexchap's answer. The instructions on my Sales Schedule don't say "whether to add or subtract the value they provide". They say:

"Column 6: This amount is the sum (emphasis added) of Columns 4 & 5 (Purchase Price and Cumulative Adjustments) and represents your estimated outside basis...in the disposed partnership interest."

The key word is "sum". Find the sum by adding the string of signed numbers. For example, with Initial Basis= $2000 and Adjustment= $-596 you will have: +2000 plus {-596}  equals +1404. Technically speaking, your adding a negative number, not subtracting. I used words instead of + and = since Turbotax thought the expression was an account number (LOL).

My Sales Schedule had this calculation and the Final Adjusted Basis ("outside basis") on it. Your's may too. This is the basis you report to the IRS. Your initial purchase price is history. If your final basis is negative, see my answer below on how to handle it. Good luck!


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