Double entry in form 8949 for sale of MLP

[Teep1]

I believe this is the classic case of 1st entry coming from the 1099 import which I updated with the adjusted cost basis and the second that I created using the K-1 form under business items which involved many interview questions about ordinary income etc. I don't see where any of this additional K-1 info comes along with the import entry from the brokerage 1099. So I now have see 2 entries for the MLP sale in my 8949. Both Long term but one is code E (reported in 1099 and no basis) and the 2nd is code F (Not Reported in 1099). The 8949 can't be deleted so it has to be taken care of at the source "Wages and Income". Seems like the easiest solution is to delete the 1099 imported entry and keep the manually entered K-1 entry with all the extra info. I don't see anything in the K-1 entry creation that lets me flag it as 1099 Reported in the 1099 Ecode). Will that be a problem since it would be using the manual entry and ignoring the imported one.

[Mike9241]

 On the 8949, enter the adjusted basis from the sales of units supplement that was provided.

you can use the cost reported on the 1099-B but then you must adjust to arrive at the correct basis determined as described above 

in the k-1 worksheet,  enter only that you made a partial or fully taxable disposal. Also, in the K-1 TurboTax subworksheet for disposal you enter the sales price as any 751 recapture with 0 cost basis, nothing else. YOU DIO NOT REPORT THE ENTIRE SALE HERE. YOU WOULD BE DOUBLE REPORTING

[Teep1]

What works mathmatically is going into the imported 1099 entry which originally did not have a cost basis and setting the cost basis = to the proceeds. That zeros out the gain for that entry.  Form 8949 still has 2 entries but only 1 showing a gain which is the K-1 worksheet entry with the correct adjusted cost basis. Not sure if that sets off IRS red flags but fixes the math. 

[Teep1]

A lot goes on under the covers of the TT questionaire for the K-1 processing.  Seems to me the K-1 questionaire processed  sale should be the official one and not the modified 1099 import. My  1099 Import only contains the proceeds and no basis and no gain. Does it make sense 1) update the imported 1099 to have the basis = proceeds leaving no gain 2)  or zero out the proceeds, basis and gains and have  all 3 zero. Either way shows $0 gain and let the K-1 processing handle the adjusted cost basis and all the other info entered during the questionaire. 

Any thought would be appreciated.

[MarilynG1]

Yes, entering the stock sale info from the K-1 and editing the 1099-B entry as you suggested is a good way to proceed.  The broker doesn't have all your partnership info (like correct cost basis), and you want to preserve your K-1 carryovers properly.  Proceeds = Cost Basis would likely cause less scrutiny by IRS than zero'ing out proceeds and basis, though the outcome would be the same, as you mention, so either method is considered acceptable. 

@Teep1 

[Teep1]

One more question about my Energy Transfer sale this previous year. My 2024 tax filing (filed 2025)was my 1st time filing for an MLP. I spent many hours researching and felt I figured things out but because they were more difficult than I cared to deal with I sold all shares the 2nd year. After much more research this year I realized I only recorded the main ET K-1 and not its 2 other subsidiaries (Sun and USAC).  Last year appears to have passed the 2024 IRS critique so far.  I had already filled out my 2025 taxes and the K-1 work for my ET sale only using the average numbers listed on page 3 but have not sent them in yet. (Thought I was done)  After reading much MLP info here I realize this years and last years both needed 3 k-1s recorded. I really hate to go back and amend last years and add 2 more K-1 this year. I'm willing to submit what I have this year and take a chance. I'm sure I'll  get a refund either way.  If you think it will get kicked back I'll pay to have them done. Interested in your thoughts. I read somewhere that many submit it in complete as I want to do. 

[DaveF1006]

It depends. The IRS uses an automated system called the Automated Underreporter (AUR). It matches the Employer Identification Number (EIN) and dollar amounts from the K-1s the partnership sends to the IRS against what you put on your return.

Even though SUN and USAC are included in your ET "package," they have their own unique EINs. If you only report the ET EIN and the "average" or "consolidated" numbers, the IRS system might see two missing K-1s (for SUN and USAC) and a mismatch on the ET numbers. This often triggers a CP2000 notice (a "we found a discrepancy" letter).

You mentioned using the “average numbers” from page 3. For MLPs, those extra pages are there to help you break out the data, not add it all together. The IRS treats each PTP (Publicly Traded Partnership) as a separate entity. You generally cannot use a loss from USAC to offset income from SUN. By consolidating them, you might be accidentally offsetting income in a way the law doesn't allow, which is a common mistake that can lead to an audit or adjustment.

Since you haven't sent it yet, take the extra hour to enter ET, SUN, and USAC as three separate K-1s using their respective EINs. This ensures your "Final" year is clean and matches the IRS computers.

Wait before you amend 2024.  If the dollar amounts for SUN and USAC in 2024 were negligible (e.g., less than $100), the IRS may never bother sending a letter. If they do, you can deal with it then. Amending a prior year for a small discrepancy is rarely worth the bother.

[Teep1]

Thanks for talking me into adding the 2 other K-1's for Energy Transfer. It took some time but less chance of having to go down this road again. Appreciate all the help here.