K-1 MLP Stock royalties and 1231 gain/loss

[Canonical]

I have added royalties income for 2 MLP stock using their K-1s (Box 7) and both royalty incomes are showing up in '2022 Rentals and royalties section' in turbo tax. Do I need to do anything else in this section ?

Also, I when I added 1231 gain/loss(Section 631c:Coal) using K-1 (Box 10), it automatically added the positive amount (income) in 'Sale of Business Property' in turbo tax and increased my tax liability. Is this how it is supposed to work ?

[nexchap]

No need to do anything else on Royalties, and TT is doing what it should with the 1231 gains.  Items on your K-1 that increase (or decrease) your taxes without also handing you cash will result in your basis going up (or down).  You'll see that impact when you sell.

[Mike9241]

on schedule E based on info from the supplemental info in box 20 you may need to enter depletion.  any amount on 13i - royalty expenses will carry to the royalty schedule. then there is the 13j amount, if any, which requires additional input.  1231 gain/losss is additional income/loss. it first flows to 4797 (certain prior year 1231 losses, can reduce the portion treated as capital gain). the capital gain portion flow to schedule D line 11A

[Canonical]

Thanks. So when I sell, will TT keep a track of both these incomes(royalties/1231 gain) or will the company issuing K-1 keep a track ? 

I saw the entries TT made in the section Royalties section and both these entries do not have the Tax ID of the company issuing the K-1 but only the name of the company issuing K-1 in the address section.

Also, the 1231 gain was added to the section 'sale of business property' by TT just as a total amount so I really had to dig deeper on where this amount came from. I have another MLP which added another amount. So please pass this feedback to TT product development to keep entries of companies in the 'Sale of Business property' section so that one can track which item came from where not just a total amount otherwise it becomes confusing and difficult to trace back.

[Canonical]

Thanks Mike. I have another question on depletion (box 20, T)

This is from another MLP stock - 

17D  AMT Item: Oil, Gas & Geothermal-Gross Income  - 43
17E AMT Item: Oil, Gas & Geothermal-Deductions - 3
20T1 Sustained Depletion - 6
20T2 Cost Depletion - 0
20T3 - Percentage Depletion in Excess of Cost Depletion - 6
20T4 - Percentage Depletion in Excess of Basis - 6
20T5

For the above I added adjusted gross income as 43 and depletion percentage as 6 in Oil and Gas depletion section. Is this ok ? It added couple of dollars to my tax liability.

[nexchap]

TT will effectively track any suspended losses, and will release them against future gains.

The K-1 provider will track anything that affects your basis, and provide you cumulative adjustments (on a 'sales schedule') when you sell.  You'd use that information to adjust your purchase cost.

[Canonical]

There is some issue in the software. After the royalty income gets added to the royalty section, the depletion added from 20T  (sustained) does not subtract against the royalty income. It caused me to pay more tax in spite of taking the premier package with live help. None of the CPAs in live help pointed to this issue.

[Canonical]

So this is the observed behavior of TT - 

Cost Depletion entry only takes effect during complete disposition otherwise if you want to enter yearly depletion amount one can enter under royalty and rental income.