should a K1 with only unsold stock affect tax due?

[luckydogz]

hi @nexchap 

Thanks for all your posts. They have been very informative. I was hoping you or others could help with the following scenario.

I have unsold ceqp (mlp) stock, didn't sell a single share, and I noticed that entering in the K1 information actually reduced the tax due.

I was under the impression that prior to selling any mlp stock, there wouldn't be any tax impact. I do have other mlp stock that but I wouldn't expect gain/loss in those to be impacted by a mlp that has no sold transactions.

Do I just have the wrong impression?

[nexchap]

@luckydogz Some losses on the K-1, for example line 1, are suspended until you sell.  But there could be other losses, for example line 8 or 9a (Cap Loss), which would flow straight to your return.  So its definitely possible that entering the K-1 could change the tax you owe.  

If you're unsure which line is impacting your tax, one way to easily trace it is to simply put in a ridiculous number into the K-1 entry (change -112  to -112,000 for example) and see what changes on your return.

[luckydogz]

Thanks for that great technique! Yes, it was box9a loss.

[Mike9241]

is the PTP box on the Turbotax K-1 checked?     passive losses on lines 1 through 3 and certain other lines would not be deductible. you are correct that in losses from PTPs are not deductible until total disposition (or may offset future income). look at schedule e page 2 to see if any loss is showing up.  there shouldn't be any 

however, if you itemize your deductions items certain items on line 13 are not passive and would increase your itemized deductions. there are other lines on the k-1 which may show losses that are not passive.