hope the following helps - total disposition only
MLP and PTP reporting k-1 and 8949/1099-B
Enter the k-1 info
Check the PTP box
If total disposition then:
Check final K-1 (s/b marked on actual k-1)
Check sold or otherwise disposed of your entire interest
On the k-1 disposition section for sales price use the ordinary income. It would be reported in box 20AB of K-1 and a column on the sales schedule. Sometimes you’ll see a column with the “751” or the words “Gain subject to recapture as ordinary income” or similar wording on the sales schedule. The following is for the k-1 sale section - not the 8949/schedule D
Sales Price = line 20AB (1065 k1) use the total on the sales schedule in the column for ordinary income or 20AB of the k-1
* Selling expenses = 0
* Basis = 0 (zero – nothing else)
* Gain is computed and should be the same as the sales price.
* Ordinary gain = enter the same amount as the sales price
* Other lines should be zero
This amount flows to form 4797 line 10 and is taxed as ordinary income. This step is necessary, so any suspended passive losses are now allowed assuming complete disposition.
Some do not understand the above. The 1099-B (capital gain/loss portion) reporting is not done in this section in Turbotax. Doing so will result in reporting the sale twice if you enter the 1099-B info.
Now for the 8949/1099-B Capital gain/loss reporting
since there are two sales you will enter each on a separate line.
The broker’s form is probably coded as B or E – sales proceeds but not cost basis reported to the IRS. This is because the broker does not track the tax basis. It used what you paid but does not reflect the k-1 activity.
The correct tax basis is (note that your sales schedule may have a column that reports the adjusted/average tax/cost basis excluding the ordinary income which must be added):
There is a column on the sales schedule that says cumulative adjustments to the basis. If it’s positive add it to the cost shown. If it’s negative subtract the amount.
Finally, add the amount of ordinary income reported above. in your case since there are two sales only add the ordinary income reported on that sale line.
The result is your corrected cost/tax basis for form 8949 – the capital gain/loss portion.
