How I report the sale of MLP shares in Turbo Tax. I sold all shares.

[nexchap]

Did you uncheck it in the interview?  That made it go away from me.  If that doesn't fix it, the easiest thing to do would be to delete the k-1 itself and re-enter it.  Otherwise, you have to figure out which form has been created in the program with this erroneous info, and delete it.  I haven't had to track that down myself, so I'm not sure where you'd look.

[idjit]

If I delete the K-1, will it still pick up my previous values from 2016?  Since I have already paid, I can see my forms.  This shows up in Part II of Schedule E,  (h) Non-Passive Loss from Schedule K-1.

[idjit]

Neither unchecking the box in the interview or deleting the numbers in the sheet that comes up if I leave the box checked works.

[nexchap]

Deleting and re-entering the k-1 will still allow you to pick up 2016.  TT may not pick it up automatically, but it will ask you if you have carryovers (the screen in question that started all this), and you'd check the box.  You can then just enter the carry-over yourself.

I'm happy to help further, but if you have more questions can you post a new question?  I'd like to keep the focus of this thread on dealing with the issues that arise from a sale,  Just put MLP in the write-up, and tag it with [k-1] and I (or others) will see it and respond.

[idjit]

Thanks.  I deleted and had to enter 2016 carryover manually, but it corrected this issue.

[nikhil_mehta]

nexchap: First of all, this thread is very helpful for me as well, thanks a lot. Another quick question related to this exact same topic - my K-1 Sales Schedule shows No ordinary gain but a -ve AMT adjustment. It says that it should land up in Form 6251 Line 17. With your trick (reporting AMT partnership basis as opposite sign of AMT gain), where would I put this entry again, so that it shows up under Form 6251/Line 17?

[nexchap]

It should still work the same way.  As an example, if your Ord Gain is 0, and the AMT adjustment is -20, you'd enter 0 and +20 in the basis row, and 0 and -20 on the Ord Gain row.  That will calculate 0 for Cap Gain/Loss in the K-1, but allow TT to take care of transferring the Ord Gain row to the appropriate spots.

[nikhil_mehta]

I understood that, but how would the "AMT Adjustment" figures land up in Form 6251/Line 17?

[nexchap]

If you're subject to AMT, TT will take care of moving it there.

[hassle]

nexchap: a couple additional questions if you have a minute..
1) what is the "1250 gain".. where is this indicated on my sales schedule or 1065? so far ive been inputting 0 for this

2) For context: I had a short term MLP holding, bought at the end of 2016, received one distribution, and then sold early 2017. I input the sales price=0, selling expense=0, and put my partnership basis to be the inverse of my ordinary gain, as reported on the sales schedule. However, later in the interview, it asks for the box info within part III of the 1065. Box 19A includes distributions, which I guess is equal to the ordinary gain in this case. Does 19A cause any double counting in any possible situation (for longer holds or more complicated purchasing/selling)?

much appreciated!!

[hassle]

@nexchap earlier in the thread you mentioned that the cost basis was the [purchase cost]+[adjustment to basis]+[ordinary gain].. Why is the ordinary gain included? why not just [purchase cost]+[adjustment to basis]?
Isn't the ordinary gain accounted for in the 1099-B by most brokers (via the proceeds - unrep. cost basis), meaning we just need to subtract out the distributions? or am I misunderstanding the rules for calculating cost basis

[nexchap]

@hassle -- on your questions:
- 1250 gain would typically be 0 for MLPs.  Its related to real estate transactions, so wouldn't apply unless you had something specific on your K-1 that mentioned it.
- 19A is really just for your information.  It doesn't affect your tax calculation.  But it is NOT equal to ordinary gain.  It is strictly money (or equivalent) that has been sent to you.  I find it useful to a) double check that it matches my records of cash received and b) in Part II, section L of the K-1 there's a line called "withdrawals and distributions" -- that line is the sum of 19A, plus the cost basis of any shares you sold (so that's also useful in reconciling the K-1 to your records).

As to calculating the 1099-B cost basis:
- First, your broker will only adjust your basis for the things they know about:  the distributions they get and pass onto you.  They don't know about all the other basis adjustments, because they don't get or want your K-1.  So their reported basis is wrong and pretty useless.  That's why they don't report it to the IRS.
- Your basis is your [purchase cost] + [adjustment to basis].  And your TOTAL gain is your [selling revenue] - [your basis].  But that TOTAL gain is split between Ordinary Gain and Capital Gain/Loss.  So the Ordinary Gain goes into the K-1, and the Capital Gain/Loss goes into the 1099-B.  But to avoid double-counting the Ordinary Gain, the "adjusted basis" you enter on the 1099-B must be adjusted to take the Ordinary Gain out.  So that's why the Ordinary Gain is added to the basis, ensuring that what goes on the 1099-B is correct.

[balibill1]

nexchap.  Thanks for all your helpful insights. I had a complete mlp sale - all long term - so I think I can use the TT interviewer.   The k-1 sale schedule includes an “AMT adjusted gain or loss” as a negative number. I am in amt territory (I think because of the ordinary gains being attributed to my mlp interests).  Do you know how I should incorporate this AMT figure into my TT return?  (k-1) says that goes on form 6251 line 17....  Also how can I check to see if my carry forward losses have all been released and can hopefully  help reduce the ordinary gain being attributed to me on the K-1 sales schedule. I had a sizable total loss on the investment but it looks like I will be stuck recognizing and paying tax on a big chunk of phantom ordinary gains....  thanks again

[balibill1]

Follow up to my earlier post. Because my sale was a final sale/disposition - when I actually checked that box on TT, it freed up loss carry forwards that offset the phantom gains....

Because  I did receive 1099-Bs from the 3 brokers where the units were held, I decide to follow your suggested approach and calculate only the ordinary gains listed on the k-1 ( by entering 0 zero for sales proceeds and then the ordinary gains from the K-1.). I then entered the non covered 1099-B data with sales price and original cost basis in that part of TT.  For the cap loss amount, however, I think I need to adjust (reduce my original cost basis) to refelect the capital loss portion as calculated from the k-1 sales schedule.  TT will let me make those adjustments but seems to indicate that I need to fill out a 8949 or maybe schedule D to explain those adjustments....  how should I categorize that adjustment to the cost basis and will TT populate it on the right forms or is there something else I can or should do (like simply reporting the “adjusted” cost basis rather (so that it matches the capital loss amount calculated under the k-1 sales schedule) rather than the original to begin with and leave it at that?   Thanks again for you help in sorting this point out...

[balibill1]

One more point in looking the 1099s 2 of 3 brokers show it as a “box E” 1099-B and the last one - Merrill says cost basis isn’t reported to IRS but does have a mark “x” which someone at Merrill said meant that they could not determine holding period which is odd since it shows date acquired and data sold all of which are 2+ years apart....