Energy Transfer (ET) Final K1

[sam992116]

I sold my units of ET last year and I got Final K1.

ET has like 5 k1 within one big K1.

My guess is Sales figures (sale same as ordinary income and other boxes 0 in order to prevent TT to create a duplicate 8949) will go to main ET entity.

Q: In Turbo Tax interview question how should I answer Final K1/Complete disposition about partnerships which ended in 2024 along with ET but they are listed within ET?

Complete disposition?

sales and purchase dates? same as main ET

Q: How should I answer sale interview question for other 4 ET entities, Just add 0 for  all boxes Sale prices, partnership basis and ordinary gain?

K- Sale Information

In general you only enter Sale and Ordinary gain info. Does it matter if you leave other boxes blank or have to enter 0 in them?

AMT gain and loss

If my column 7/Gain subject to recapture as ordinary income is  = 5000 (made up number)

Column 8/AMT  gain/loss Adjustment = -100

Q: I should be entering -4900 as AMT gain/loss with TT interview section of K1?

[sam992116]

In public traded partnerships -k1 entities, does pass losses or carry over losses be offset income ONLY from same entity?

ET is one pubic traded partnership but has other partnership within its umbrella. All other partnerships within ET k1 are separate entities?

I  sold my ET (all of them). Question I am trying to understand, does all passive loss across all ET entities has to combined or only passive loss be offset by income from same entity (same FEIN)?

[Mike9241]

ET is a tiered PTP and the IRS has not clarified whether the income from one tier can offset the loss from another tier

from the instructions 

The passive activity loss limitations provide that individuals and some other types of investors that do not meet certain business participation thresholds may only deduct losses from these activities to the extent of the taxpayer's income from such activities. One of the unique tax issues related to investments in PTPs provides that the passive activity loss limitations are generally applied separately with respect to each PTP that is owned by the taxpayer. However, the application of the passive loss limitations to tiered PTPs is not entirely clear, so you should consult your personal tax advisor as to whether you are subject to the passive loss limitations, and if so, how the information presented below should be reported on your federal and state income tax returns.

 As to your situation, the easiest thing is to report everything on one k-1 because you disposed of all your units all the passive losses from the various tiers are allowed.

Be sure to use the supplemental sales schedule when reporting capital gain/ loss because that's the only way to know your proper tax basis (the broker does not) which is done through the 1099-B/Schedule D not the k-1 whereas the ordinary income recapture is reported through the k-1 and not on Schedule D 

sales price on k-1 is this ordinary income. your basis in it is zero.  this ordinary income increases your tax basis (see sales schedule) for capital gain/loss purposes 

if you had this last year and used multiple k-1's to report each tier. respond back if you need help in how to handle this in Turbotax

[sam992116]

@Mike9241 

Thanks for you input.

Yes I did used Separate K1 last year for ET as it has 3 entities and 2 of these entities have Net Rental real estate income (Box 2 of K1) as well. So there are 5 K1s.

Cost Basis Formula:

My understanding is 

Purchase price (Box 4)  -  Cumulative Adjustment to basis (Box 5) + Gain Subject to Recapture as ordinary Income = Cost basis now to report on 8949/Sch D.    Is my assumption correct?

AMT Cost basis: Lets say Box 8 (AMT cost gain/loss adjustment) is -100.  It will decrease cost basis or ordinary gain part by this amount for AMT cost basis box on K1?

Adjustment for Bonus Depreciation Box 10 and Box 11 on K1 sale section . I did not see where would I enter this information? or TT will ask me if this information is needed,  

In Turbo Tax, K1 interview  section of Enter Sale Information.

Which boxes should I enter 0 vs leave them blank ?

Selling Expense

Partnership Basis

1250 Gain

[Mike9241]

for the 5 K-1s indicate they're final. on the subschedule for gain/loss on disposition indicate on 4 that the sales price is zero and basis as zero. this is so the passive losses are released. 

on the5th the main ET perhaps indicate on the subschedule for gain/loss that the sales price is the ordinary income listed on the sales schedule basis is zero. 

if the amt adjustment on gain/loss schedule the same as the same as line 17B of the k-1, then you need do nothing.  the 17B entry takes care of adjusting the gain/loss for amt purposes.  

reporting this on both 17B and the gain loss schedule results in doubling the 6251 amount.  admittedly I couldn't get the capital gain loss for amt purposes to work.

Purchase price (Box 4) - Cumulative Adjustment to basis (Box 5) + Gain Subject to Recapture as ordinary Income = Cost basis now to report on 8949/Sch D. Is my assumption correct? yes

[sam992116]

Hello @Mike9241 

Thank you for your input and help. I have a general question

In partnership K1- sales data there are 2 columns  under ADJUSTED FOR BONUS DEPRECIATION

Box 10-  Culmulative Ad. to Bassi

Box 11-  Gain Subject to Recaputre as ordinary income

Does this information go any where or do I need to check or adjust some numbers within K1 forms?

[sam992116]

Hi @Mike9241 and others

I know this topic has been discussed a lot before.

My ET units came ETP  which was absorbed into ETE which changed its name to ET in 2018.

It was not sale  so losses were suspended.

Now I have sold ET all shares (I did not sell any share prior to final sale).

Q: Can I add suspended losses from ETP into passive losses carryover of ET?

If yes how to do it, in interview mode (where there is a page of Enter Info of passive losses or Form Mode?

My Prior Carry over suspended losses from ETP are quite large compare to next few years? Not sure if it is allowed?

I am using as example of interview mode. I manually added 5000 to year 2018 where it is showing passive losses carry overs by years  but it is not changing anything in terms of calculations.

So it is too late or too complicated. Other than Filing Amending returns which is also too late for year 2018.

[Mike9241]

I have to admit I cheated. Knowing that i would eventually sell ET. i didn't breakout the separate k-1s 

so when I sold i only had 1 k-1 to deal with, ET did not provide a separate breakdown of each entity on the sales schedule. since you used separate k-1's, all i can suggest is you gather the carryforward info from 2023 for each and change the numbers on the basic ET k-1. then delete those extra k-1's. so all reporting is on just one  k-1.  

[sam992116]

Thanks @Mike9241 

I have tracked down all carry over looses. 

I had ETP which was merged into ET.  I did not add carry over losses of ETP into ET as it was not sale and K1 did not show Final K1 and I did not know at that time how to handle it.

I just left it there with TT and it is still there with all information and there is no new information added since merger as there was no K1 for ETP.

I tried 3 methods

Option 1

If I enter Final K1 for ETP and check Partnership end and disposition was NOT sale.  It does NOT release carry over losses

Option 2

Check Final K1 for ETP and check complete disposition and use same sale dates as for ET ( since ETP was merged into ET), all losses are released and show up K1 work sheet, Sch E and 4797.

Q: Since ETP was ended while back, does its Partnership Tax ID still work or can cause issues or questions?

Option 3

I can add carry over losses from ETP into ET.

It works well for regular and AMT section within Forms mode of K1 but QBI section I was not able to make it work in the forms mode. or QBI section has to be changed/adjusted within interview mode?

Any thoughts which method to use?

[Mike9241 · Accepted solution]

option 2 works by entering in the disposition section 0 as sales price, basis, and ordinary gain. the 751 recapture is reported entirely on the ET k-1. for the 1099-B you only report the sale of ET using the sales schedule to figure basis.

option 3 also works but I think option 2 is simpler because there is no need to move the suspended info from the ETP k-1 to the ET k-1