My PTP (Magellan Midstream Partners) was sold (acquired by ONEOK), and my broker reported sale proceeds on Form 1099-B, under "Unknown Term Gains or Losses on Gross Proceeds. Report on Form 8949 Code X".
I don't understand how to correctly report the sale proceeds (the capital gain part, not the ordinary income which is done under K1 partnerships form) in Form 1099-B in TurboTax.
When using the step-by-step wizard, under "what type of investment did you sell", there is no "Partnerships" option.
I tried choosing "Stocks" but it does not seem right, and if editing form 8949 directly, there is no way to way to specify "Code X" which according to my broker is needed "IRS Instructions require Unknown Term transactions to be assigned Code X for reporting on Form 8949."
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reporting capital gain portion of sale of PTP form form 8949.
in Turbotax there is a page that says it'll walk you through the entering the sales details.
1) for the sales section box select unknown term basis reported to the IRS (the x)
2) for type of investment you can use stock
3) code X on the 1099-B indicates to the IRS that the broker, for whatever reason does not know the holding period, so you can't use X in a tax software because a holding period must be specified. you'll need to enter the date(s) sold from the 1099-B and the date(s) acquired which should be on the supplemental schedule. Turbotax will use these dates to determine reporting as long-or short term. If you have multiple acquisition dates you can use any date more than a year before sale for the long-term portion and any date less than a year before the sale for the short-term portion.
4) for cost refer to that supplemental sales schedule that was included with the k-1
The correct tax basis is (note if your sales schedule has a column that reports the adjusted/average tax/cost basis excluding the ordinary income add the ordinary income - that's your tax basis- skip the rest).
What’s on the sales schedule as purchase price/initial tax basis (usually column 4).
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.
The result is your corrected cost/tax basis for form 8949 – the capital gain/loss portion.
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