MLP Carry Over Suspended Losses on final sale.

[lopears]

I sold a MLP in 2023 I have owned over a decade and am calculating final suspended carry over losses. Does Turbotax report these/each specific MLP suspended losses every year to IRS or is the KI partner A worksheet showing them just kept for my records for each MLP within Turbotax? Now the MLP is sold I am figuring out how to total and report all the suspended losses, even from before using Turbotax.

[nexchap]

If you've been using TT over the years, the suspended losses have been tracked and carried over each year.  If this is your first year, you'll come to a screen in the interview asking you to enter them.

Either way, since this year is a complete disposition, TT will report any released losses on Sched E.

[lopears]

Yes understood. My question is: does the suspended loss carry over get reported yearly by TT for an MLP as part of the package sent to IRS? I think not as its just in the worksheet but wanted confirmation. For those of us with losses from before we used TT or in some cases (TT didn't carry them over in 18-20) this is an issue.

[nexchap]

@lopears Suspended losses aren't reported to the IRS.  They exist on the K-1 worksheet, but that isn't part of any submission.

[lopears]

Thanks so much for the confirmation:) I'll dig through all the old KI's and get my total to enter during the walk thru.

[maynard7]

In 2023 I sold three MLPs. I have gathered the K-1s for the 5 years that I owned them all. How do I figure the amount of the suspended loss to input into TurboTax during the interview process? I did not use TurboTax every year to do my taxes so I need to do something manually. Thank you for any advice.

[nexchap]

@maynard7 Some items on the K-1 are reported in the year they occur (e.g., interest income).  Other items are considered passive and are suspended until passive income is generated.  So you'd have to sum all the passive items on the K-1, and if the total is negative the net would be suspended to the next year.  Given the complexity of K-1s, you'd have to work through it line by line to see which is which.

Two possible workarounds:  1) you can still buy TT for prior years which would allow you to enter the K-1s, and see what TT does with each line item.  2) Alternatively, you could try entering them into this year's version (one at a time, in a new file), and see what gets suspended.  But note that line numbers can change each year, so you'd have to be careful about getting income into the correct spots.

dfg

[maynard7]

Thank you for your ideas on how to proceed with this. Unfortunately I won't be able to do either one of them because I'm in South America until late October. I guess I could call my sister and have her go through my laptop and look for these documents that I need, but before doing all of that, is there a place on my 2022 tax return where I can see how much suspended losses were carried forward (just for the single tax year 2022)?  If that isn't easy to figure out I think my best plan of action is just to verify that I have no duplicate entries and then just submit my tax return now. I'm sure that I will receive at least one amended K-1 from my five remaining MLPs and I'll have to file an amended return anyway, but I could do that after I get back.  Thanks.

[nexchap]

@maynard7 The suspended losses aren't in your return anywhere.  They're only in the TT file itself, in the K-1 worksheet.  One other option would be to hand all the K-1s to a CPA.  It wouldn't take someone familiar with K-1s more than an hour or two to simply total up the suspended values for each MLP.

[lopears]

Most MLP's have the past 3 years K1's online with the last 3 years suspended losses also shown. Go to tax package support to check. I was in the same position with the recent MMP sale and added up all the suspended losses from previous paper K1's and the last 3 years in tax package support.

[maynard7]

Thank you nexchap and lopears for your input.  I think the only thing I have left at this point is to look for duplicate entries on the K-1 and elsewhere.  I have found lots of instructions on here about how to take care of that problem so hopefully I won't have to ask any more questions  🙂