Help filling out Sale Information for Final K-1

[Rick19744]

That statement copy does not meet the information required in the regulations.

Just draft a statement as I explained previously and include it as a pdf with your tax return.

[mellynlee]

Here is some more information that was sent, regarding the Section 751 Statement:

Info for Section 751 Statement

Notice it just says to "Attach the IRC 751 Statement to your tax return..."

[Rick19744]

You are attaching a statement, as described in my previous reply, and will be in compliance.

[mellynlee]

OK, I will provide the 751 Statement as you advised. 
The piece of paper that was sent to me implied I just needed to send in that paper (which is strange), and there is no way I would have known to do this if you didn't tell me, so thank you again! Also, TurboTax did not alert me to this either? Shouldn't it have?

Once I create this statement (a PDF document), I don't know how I can e-file it with TurboTax. I noticed this following TT discussion that implies I will need to mail in my tax return, and cannot e-file:

https://ttlc.intuit.com/community/business-taxes/discussion/how-do-i-enter-a-section-751-statement/0... 

Thank you!

[Rick19744]

The efile process is not my forte, but it does appear that you will need to paper file your tax return.

When doing so, just double check that you include the Section 751 statement (although I am sure there are thousands of returns that miss this, and not aware of any penalty).

When sending in your tax return(s), make sure you send it certified mail return receipt.  Then maintain the return receipt once returned to you.

TT is software for the masses.  Partnership transactions are complicated.  Could TT generate a Section 751 statement that a taxpayer just needs to enter a few items.....absolutely.  However, there are many more areas of the tax law that TT focuses on that impact many more taxpayers.

[mellynlee]

OK, I will do that. Thank you!

I understand that this is not a typical tax issue. I sometimes think it will be easier if I just feign ignorance and not try to do all this work correctly!

However, since I've come this far, I have one more question (but this might be another example of where I don't want to know the answer...)

The K-1 had Box 16 checked (stating that a K-3 is attached)

However, the K-3 is not available until June, so I don't actually have it now.

In TT, it says: If your Schedule K-3 has no foreign income or taxes on it, you can answer "No" to this question.

My additional instructions had this statement on it (see Part III, Box 16):

Part III, Box 16 of K-1

So, I don't think that Suburban Propane has foreign income or taxes, but I also saw this online:

https://www.prnewswire.com/news-releases/suburban-propane-partners-lp-declares-quarterly-distributio... 

It states: 

Please note that 100% of Suburban Propane Partners, LP's distributions to foreign investors are attributable to income that is effectively connected with a United States trade or business.  Accordingly, all of Suburban Propane Partners, LP's distributions to foreign investors are subject to federal income tax withholding at the highest applicable effective tax rate without exception.

I'm not sure what they are saying, but does this mean I can still check 'no' in TT for the question regarding a K-3? (If not, then it sounds like I would have to wait until June, to answer all the other questions in TT about the K-3...)

Thank you again!

[DaveF1006]

It depends. To be on the safe side, I would  file an extension on this return until you receive the K-3 because there could be items on the k-3 that have international tax relevance. This is an important issue with the IRS thus you will want to be in complete compliance with all federal tax laws.

[mellynlee]

I was afraid this was going to be the answer.

Hopefully, someone will be able to help me with the K-3 questions in June.

Many thanks to @Rick19744 

[Rick19744]

Keep in mind that filing an extension is just an extension to file the return.

If you have a tax liability, this needs to be remitted along with the extension.

[mellynlee]

OK, I thought I was pretty much done with this K-1, but I noticed a 2024 State Schedule was included. It states that I "may be required to file tax returns with the state listed even though you are not a resident." It then lists all of the states, but I have losses in every state, although there are also a small handful with very minor portfolio interest income.

I'm really hoping I can just ignore this...since I only have losses, I shouldn't owe them any $. I don't imagine I would get any $ back from a state where I am not a resident either.

Please confirm...thank you!

State Schedule

[Rick19744]

For some reason I am not getting notifications on my response threads.

I thought you were done as well.......LOL.

In general, as a nonresident with activity in a state, you do potentially have a filing requirement.

However, in looking at the amounts reflected on the schedule, I would be fairly certain that you are below any filing requirement in the states.

The only way to be sure is to review the filing instructions for each state.

The only way you would get any $$ refunded is if the PTP actually withheld state $$.  Doubtful they have done that and that is something they would have to provide you with as well.

[mellynlee]

OK, I am going to go with that thought and assume I don't need to file. 🙂

Thanks again for your help!

[mellynlee]

@Rick19744 And just a heads up - I will be back in June, to ask questions about that K-3... 🙄

[mellynlee]

@Rick19744 I was wondering if I needed to modify this Sales Info worksheet to account for any AMT adjustments. If you notice my photo of the Sales Info page, the Partnership Basis and the Ordinary Gain are the same in both columns - Regular Gain/Loss and AMT Gain/Loss.

However, if you see the photo showing the Sales Info, there is a column 15 (Alternative Minimum Tax Basis Adjustments) which contains 2 amounts equaling -370.

In another post for another K-1 that I had, I think I needed to put those numbers into the Sales Info. (See: https://ttlc.intuit.com/community/taxes/discussion/re-k-1-with-box-1-and-box-2-values-how-to-fill-ou... ) 

So would I need to do something similar on this K-1? If so, what would I enter into the AMT Gain/Loss column for both Partnership Basis and Ordinary Gain?

Also, I understand that your method of entering the K-1 is slightly different from the method suggested in the above post. Can I assume that the resulting tax numbers would be the same using either method, and also, do you think anything would be flagged by IRS by using the 2 different methods for the 2 K-1s?

Thank you!

[Rick19744]

Follow-up comments to your questions:

• While I haven't read the methodology you are referring to, the goal is to:
  • Avoid any matching notice
  • Arrive at the correct end result
  • I prefer my method as the gain / loss is being reported (determined) in the K-1 area for the activity that is being disposed.  Most 1099-B's report an incorrect basis and that is why I just net this out to avoid any potential matching notice.  And in most cases the basis is not reported to the IRS.
• You should adjust your AMT basis in the gain or loss section.  There appears to be a $2 rounding issue as the form K-1 reports $372 and the detail schedule only reports $370.
• I would use the $372 that is reported on the K-1
• This figure is a positive figure, so you would increase your AMT basis by the $372 
  • Your AMT basis should be $57,178 
  • Don't get hung up on the fact that in one place it is positive and negative in another.  This is the result of presentation.  The $370 is report as a negative as if you read the comments, this is the amount that you need to "adjust" your total gain or loss.....not the basis.  Both have the same impact.