I have a 2-person LLC that trades PTP's as a means to generate income. When I enter the PTP K-1's, they show up as losses under "Other Income(loss)" and reduce my LLC's Net Income when I believe this should not be the case. In other words, it sums all the PTP's OB Losses rather than treating them as a "QBI Suspended Loss - Passive" Carryforward...
Is my thinking incorrect?
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hopefully, someone will correct me if I'm wrong, but I don't think I am. each PTP needs to be separately reported to each partner because the passive loss suspension/qbi/etc comes at the individual level not your LLC/partnership. if you traded 100 PT's you will need to furnish each partner the reporting of their share of each PTP which means in their return they will have to enter 100 PTP K-1s. This comes from practical experience where a client invested in a master limited partnership (MLP) that only invested in PTPs they sent an aggregate k-1 which was marked do not use for tax purposes. behind that were 50 K-1s - one for each of the PTPs it invested in. Tax law say each PTP stands on its own. This necessitated entering the 50 k-1's in the taxpayer return. Partial dispositions create some issues and it's easy to have unrecognized wash sales because the broker does not know the true tax basis to determine if the wash sale rules apply if you disposed of a PTP at a loss and 30 days before or after acquired a substantially identical PTP. you are on your own for determining wash sales.
making things even more complicated is the capital gain/loss to report in the partnership return and to the partners. The broker's statement does not represent the correct tax basis because it does not account for partnership activity and any 751/ordinary income recapture. the partnership needs to report the correct gain/loss on disposition to the partners and it's the partners who would then report any 751 gain for each partnership (usually the amount in box 20AB of the k-1. this is important because if a PTP generated a loss the only way its freed up is upon complete disposition. Turbotax recognizes this by the answer to the questions in the sale section of the K-1.
hope you filed your partnership return it was due 9/15 not 10/15
i don't know if Turbotax business is capable of properly reporting your LLCs activity.
@Mike9241 wrote:i don't know if Turbotax business is capable of properly reporting your LLCs activity.
Forms Mode will most likely be necessary.
@Mike9241 Thanks for the reply.
Are you saying each person needs to input their own K-1's into something like Premier? It cannot be entered into Business?
I'm aware that I'm late on all of this. Unfortunately, my CPA had health issues and sort of dropped the ball. Separate issue altogether, and IRS says it doesn't sound like I qualify for Section 9100 relief.
@tagteam Regarding "Forms Mode", I did notice that entering K-1's was not automatically propagating data to "Section A - QBI Deduction - Statement A", as is the case with Premier.
Thanks!
if you are filing a partnership return each PTP is a separate activity which needs to flow through separately to each partner/member K-1. I don't know Turbotax business, so I don't know if its capable of providing the proper reporting to each partner/member.
even if you take the position no partnership return needs to be filed, if there was an investment in 100 PTPs each individual partner/member would have to enter 100 k-1s in their 1040 which I think is beyond the capabilities of any Turbotax personal tax product. Of course, the numbers would have to be split based on whatever allocation was agreed to which may create further issues depending on what name ein/ssn is on the k-1.
Makes sense.
I ended up inputing them into Premier edition.
Are you saying Turbo Tax can't handle 100 K-1's? Or any K-1's.
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