How do I report ordinary gain amount adjustment with sale of PTP interest that is part of 1099-B form?

[mgbraddock1]

The ordinary gain adjustment amount comes as part of the K-1, separate from the 1099-B form.

[ToddL]

Deleted [Duplicate]

[monigen]

I received a separate form from an LP entitled Sales Schedule.  with 10 boxes.  box 8 goes into form 4797 part II line 10.  How do I put that information into that box???  

[ToddL · Accepted solution]

Reporting Sale of publicly-traded limited partnerships

Steps to report the gain on sale of your publicly-traded limited partnerships:

1. Enter “0” (zero) in the Sale Price & Partnership Basis blocks of the K-1 “Enter Sale Information” interview screen. You can leave the Ordinary Gain Entry the same as reported on the K-1

"From the Schedule K-1 Partnership 2014 (Form 1065) Additional Information worksheet in the TurboTax program, Instructions on reporting Disposition of Partnership Interest:

If this is a full or partial disposition of a publicly traded partnership (PTP) or master limited partnership (MLP) that was reported to you on a Form 1099-B, enter a sales price of zero on line 5 and a basis of zero on line 7 below. Enter the 1099-B transaction on Schedule D, checking the appropriate "Reported on 1099-B" box A or B.

Line 5  Sales price (If box 1a(4) is checked, enter estate valuation.)

Line 7  Basis of partnership interest"

 2. Enter the 1099-B as a Box A (or D) Transaction (Short term (or Long term) with cost basis reported to the IRS) and check the Add More or Edit) Details box just below the Description Box. If, after taking into consideration the information already reported on the K-1, you need to correct the basis reported on the Form 1099-B, you can do so by selecting “I need to add or fix info about this sale that’s on my Form 1099-B.”

This includes taking into consideration the ordinary gain you reported in the “Enter Sale Information” interview screen of the K-1.

The Adjusted Cost Basis in the Correction interview is just that – an Adjusted Cost Basis. It is NOT an adjustment to the basis reported in the 1099-B. If you need additional guidance on calculating the adjusted basis, pleas update this answer with a "Comment".

When these entries are made, everything will flow correctly to the Form 8949, Form 4797, Schedule D and Form 1040.

There will be two Form 8949s – one reporting the entire gain as shown on the 1099-B (STCG or LTCG), and the other backing out that gain as an adjustment (source was K-1 Ordinary Gain entry mentioned above).

[dlidema]

Need more help.  First, do you mean that I adjust the basis reported on the 1099-B, using the info provided with the final K-1?  Second, why are passive losses still carried over, even tho' I checked Final K-!?  This was a complete disposition of the PTP

[GHA]

I am talking about recapture ord inc for a K-1

[bc1015]

You can leave the Ordinary Gain Entry the same as reported on the K-1? where on the K-1, from PartII item-L (current year increase) or PartIII line 9a?

[rebecca11]

my 1099-B did not provide date acquired, cost basis or unadjusted gain/loss information.  I calculated my cost bases and provided the acquisition date, where do I allow for the cumulative adjustments to basis that is shown on my K-1.  This basis adjustment is a loss which should reduce my gain on this complete sale of the partnership.  Do I use my basis calculation on the 1099 and then put the cumulative adjustment to basis 'add or fix info about sale' in the correction interview?

[nexchap]

I see this answer popping up do to recent activity.  Be very careful with it.  If anyone enter's 0 for sales and for cost basis, but then enters a positive ordinary gain, TT will generate a capital loss on the K-1 worksheet which it will treat as passive, suspending all or most of it for the current year.  The 8949 generated to back out the gain that was "as an adjustment (source was K-1 Ordinary Gain entry mentioned above)." will not be accurate.  This answer describes a way to work around this:  <a rel="nofollow" target="_blank" href="https://ttlc.intuit.com/questions/3760966-how-i-report-the-sale-of-mlp-shares-in-turbo-tax-i-sold-al...>

[Layne7]

First of all, I understand that 0 must be entered for the  Sale Price & Partnership Basis blocks in K-1 section. However, for step 2 where the cost basis in 1099-B section needs to be readjusted after being imported from my brokerage, thats where I am confused. In my case, I know when I inherited this PTP, my cost basis is 2500.  Furthermore, my Schedule K-1 is showing an ORDINARY LOSS of -360 in BOX 1.  So what am I supposed to do here?  Is it add these 2 entries together where the ADJUSTED cost basis is now 2500 minus 360 =  2140 or am I supposed to increase the 2500 by 360 to compensate for this -360 which is later added during the shedule K1 interview.  Therefore my ADJUSTED cost basis in Schedule D is 2860.  PLEASE ASSIST. Reading the other comments got me REALLY CONFUSED.

[Layne7]

First of all, I understand that 0 must be entered for the  Sale Price & Partnership Basis blocks in K-1 section. However, for step 2 where the cost basis in 1099-B section needs to be readjusted after being imported from my brokerage, thats where I am confused. In my case, I know when I inherited this PTP, my cost basis is 2500.  Furthermore, my Schedule K-1 is showing an ORDINARY LOSS of -360 in BOX 1.  So what am I supposed to do here?  Is it add these 2 entries together where the ADJUSTED cost basis is now 2500 minus 360 =  2140 or am I supposed to increase the 2500 by 360 to compensate for this -360 which is later added during the shedule K1 interview.  Therefore my ADJUSTED cost basis in Schedule D is 2860.  PLEASE ASSIST. Reading the other comments got me REALLY CONFUSED.

[gnb42town11]

1.  This is a memo I typed for myself after finally figuring this out.  I use Vanguard and thus you should susbstitute your broker's name when you see Vanguard. To enter capital gains/losses and ordinary recapture on the sale of partnership interests as reported on brokerage statements and K-1’s, follow the following instructions: [NOTE: This approach avoids entering totals received from the broker and then trying to figure out where basis adjustments etc. reported in the K-1 package go. Make each 1099-B broker statement an EXHIBIT to attach to the return which reflects the adjusted totals and enter the totals on the appropriate TurboTax input schedule as indicated below. Although the Exhibit may not be required, I always attach them.  [Use the FORMS approach to enter the data outlined below NOT the EasyStep – which I’ve never used.  As a retired CPA who specialized in taxes, I use the FORMS approach.] This is rather lengthy, I suggest you print it out.

2.   FIRST STEP:  Enter the K-1 data on the K-1 entry sheet.   {Assuming ALL units are sold} - on the “Final/Amended” section at the end of Part II, click on the:

a.   Final K-1 box

b.   Partner sold or otherwise disposed of entire interest box….

c.   Click on the QuickZoom button –  then to Part II Disposition of Partnership Interest

                                              i.      Check boxes on 1a and 1a(1)

                                            ii.     Enter dates etc on Line 2,3&4.

                                          iii.     Enter “0”s on Selling Price and Basis, line 5 & 7, at the bottom of the schedule. Do not enter the actual data here.

3.   SECOND STEP: Go to the schedules in each K-1 package from partnerships sold which show the adjustments to basis required, and the ordinary income portion etc.

a.   Determine the number of units sold for Long-term and Short-term transactions respectively from the Vanguard statements of sales. Draw a line to separate the two categories. Add and note total L/T and S/T adjustments.

4.   THIRD STEP:  Make a copy of each Vanguard 1099-B schedule of “Proceeds from Broker and Barter Exchange Transactions” to become EXHIBITs to reflect the adjustments. Enter each adjustment for each partnership at the bottom of the schedule for the basis/gain/loss info shown in the 1099-B.  The sum of each column is the adjusted amount to enter on the input sheets. The EXHIBITs will be attached to the return. There will generally be four (4) 1099-B’s to reflect:

a.   L/T – Basis reported to IRS [Box 3] transactions

b.   L/T – Noncovered securities - basis not reported to the IRS [Box 5]

c.   S/T – Basis reported to IRS [Box 3] transactions

d.   S/T – Noncovered securities - basis not reported to the IRS [Box 5]                                          

                                            i.     The name for each one should contain the relevant description, e.g. “Taxpayer Name L/T Basis Reported…” etc which will make it easier to find each one in the left margin menu in FORMS mode.

5.   FINAL STEP:  The totals after adding/(subtracting) the adjustments determined on the above 4 schedules will be entered on two different TurboTax Schedules:

a.   Use a separate CAPITAL GAIN (LOSS) TRANSACTION WORKSHEET for each of the categories listed above – creating 4 different transaction statements.

                                              i.      L/T – Basis reported to IRS [Box 3] transactions

                                            ii.     L/T – Noncovered securities not reported to the IRS [Box 5]

                                          iii.     S/T – Basis reported to IRS [Box 3] transactions

                                            iv.     S/T – Noncovered securities not reported to the IRS [Box 5]

                                                 On each one:

????????????v.?Complete the relevant info in Part I.

                                            vi.     On Part II,

??????????????1.   Line 4 Company Name – enter SEE EXHIBIT “x”. 

??????????????2.   Lines 5c and d – VANGUARD and a/c number

                                          vii.     Part III – enter relevant info on lines 4 and 5

                                        viii.     Part IV – check boxes on lines 1, 2 and 5b

                                          ix.     Part X – this is where the key info is entered for sales price, cost etc. on lines 4 and 5.  On line 7 “Total adjustment to gain (loss)” enter the Ordinary Gain as a negative number. [This ordinary piece will be entered as a positive amount on Form 4797 in the next step]. The adjusted gain should agree with the adjusted gain determined on the EXHIBIT.

??????????????1.   Note on line 9 the codes can be determined by putting your cursor on the box and click on the HELP CENTER in upper right. Then click on “Form 8949 Adjustment Codes” in the popup box. Generally it should be BMO.

b.   On Form 4797 Sales of Business Property input form, pg1, enter L/T and S/T ordinary income adjustment amounts on two separate lines:

                                              i.     Column (a) Description – enter the name of the EXHIBIT “x” -ORDINARY.

                                            ii.     Column (d) Sales Price – enter the ordinary amount. [no other info is required – only sales price.] These amounts will show up on the two parts of the Form 4797 which you select in the next steps.

                                          iii.     Column (h) indicates whether its short-term [goes in Part I] or long-term [goes in Part II].

                                            iv.     Column (i) – your selection is for Taxpayer or Spouse ownership.

c.   This should complete the process. Review Schedule D and Form 4797 to see that the L/T, S/T capital gains on D and the L/T, S/T ordinary income totals are properly reflected and agree with the totals from the EXHIBITs above.  If you followed the details above, they should!  Good luck.

[gg33]

My K-1 details on PTP sale shows an "AMT gain/loss Adjustment". When entering info in the interview under the "AMT Gain or Loss" column do I apply this adjustment  to the "Ordinary Gain" or to the "Partnership Basis" , or both , or what? Or is this not where the adjustment is entered?

[SWEXPY]

Thanks, but only part of your routine worked for me.  First of all I could not figure out how to make Worksheets into EXHIBITs.  Everywhere I looked TT says you cannot attach Worksheets for your records.  Second, after entering the ordinary income on the Form 4797, that income did not appear anywhere else in my return.  I believe I have to pay taxes on the income (less prior year losses), but the income has to pop up somewhere (most likely on Form 1065).  It does not ...

[gg33]

My K-1 details on PTP sale shows an "AMT gain/loss Adjustment". When entering info in the interview under the "AMT Gain or Loss" column do I apply this adjustment  to the "Ordinary Gain" or to the "Partnership Basis" , or both , or what? Or is this not where the adjustment is entered? Thanks. Gene