@rona11  1) You've got it, except that I don't think column G (on 8949) matters unless you're adjusting a 1099 where the broker reported the cost to the IRS.  In this case, they didn't. 2) Yes, you're basis will approach 0 much faster than you expected.  But all those losses will accumulate and be available when you completely sell your EPD holdings, or to offset income from the partnership or Ordinary Gains on partial sale.  You can see the mechanics in Form mode, if you look Section A of the K-1 that TT populates. ... View more

@rona11 Welcome to the exciting intricacies of MLPs!  On your questions: a) Prior to this year, taxpackagesupport defaulted to FIFO, which was virtually never right.  So correcting lots was almost always a requirement.  Now that they've defaulted to supporting 84-53 (unified basis), its shouldn't be necessary to change anything unless you've got guidance from a CPA who believes that 84-53 shouldn't apply.  So I'd leave the K-1 alone, but try and correct what Fidelity did so you're brokerage account and taxpackagesupport account are in sync.  Note that, if Fidelity is difficult about that it probably won't matter (since they don't report cost basis info to the IRS), but if you're at all OCD it will be a discrepancy that will bug you. b) In a "normal" stock, if you bought for $10, collected $2 in dividends, and then sold for $15, we'd all agree that you'd pay taxes on $7 (cap gain of $5 and dividends of $2).  And, because "normal" tends to be simple, you'd easily see those numbers:  the $5 would show up on Sched D and the $2 would be on Sched B.  Well, in a MLP (using the same numbers), you would also still wind up paying tax on the same $7.  But it would be spread all over the place.  You'll see "Gain Subject to Recapture" showing up on one form, Cap Gain (of a number you had to calculate per this thread) on Sched D, recognition of passive losses on Sched E, potentially some interest and dividend income showing up on Sched B (but not the $2 -- that's ROC -- so its random int and divs that the partnership earned), maybe some foreign tax stuff, and if you're lucky their may even be some charitable contributions made on your behalf.  BUT, if you add everything up over the years, it will still be $7 in total wealth being taxed.  So long answer short, you shouldn't be "concerned" about the Ordinary Gain (since you'll have some Sched E losses to offset it), but you should try to be cognizant of all the spots your K-1 deposits money on your return.  Ultimately, the only way to be sure you've used TT correctly is to have a good understanding of what it should be doing, and then double-checking (trust but verify!). ... View more

@GoodShip I just checked my first K-1 of the season and saw the same:  unified basis seems to be the new default.  I edited my response above to reflect the improvement. ... View more

@308Tom You're correct.  In the past, K-1 providers didn't reflect this in their sales schedules, and it was incumbent on the filer to properly work through the mechanics.  As of this year, it looks like at K-1s coming from TaxPackageSupport.com have introduced unified basis into their sales schedules.  Hopefully, this is a sign that all of the K-1s coming out will do the same. ... View more

This is not a simple problem, and I'd advise sitting down with a CPA to work through all the implications, especially since you'll have to repeat the exercise every year you own the MLP plus do some more figuring when you eventually sell.   There are a couple reasons its not simple: In the best case, when nonrecourse liabilities aren't part of the picture, you first have to figure out what your basis would have been ignoring distributions.  The amount below zero is lost forever -- it can't be added to your suspended losses since you don't have basis.  Then the difference between your reported capital account and that separately figured basis would be declared as a "distribution in excess of basis" on sched D.  In future years, all basis calculations will have to be continued in your own records, since the K-1 will keep reporting a steadily more negative number.  This is the "simple" case If the MLP allocates you any nonrecourse liabilities, then its actually more complicated.  You may still have basis, but you no longer have capital at risk which brings form 6198 into play.  This creates another category of record keeping and complexity where I'm not comfortable trying to give advice, let alone determine if Turbotax can track any of it for you. Note that if you don't want to make this an annual exercise, you have two options: Do a complete disposition, and then repurchase in 31 days (to avoid a wash sale).  This forces you to recognize any potential taxes, but at least resets your capital account Purchase enough new shares annually to keep your capital account positive. Sorry I can't be of more help. ... View more

@J295-- Interesting.  I stand corrected.  But I'd recommend confirming that article with an accountant.  As an example, if you sold a portion of your MLP, you'd be able to use suspended losses to offset the ordinary income, but not to offset the capital gain.  So being able to offset that capital gain in this case is a bit different.   Note that if you want TT to release suspended losses to offset that gain, you'll have to report the gain somewhere on the K-1 (like line 9a).  At this point, keep really good records, since you're entries for the K-1 aren't going to match what EPD sent. ... View more

@J295-- To answer your specific question:  distributions in excess of basis would be reported as long term capital gains, which you can do by creating a 1099-B.  So if you need to report $100, you'd just have a 1099-B with code F that reports a sale of $100 and cost of $0.  You can do this in forms mode, or in the interview when it asks you if you have sales not reported by your broker.  You can't use suspended losses to offset this.   But your situation is a lot more complex than that, and this is where I advise talking to a CPA because its more complex than simply getting the right info into TT.  First, your 'tax basis' is not the same as your capital account:  the share of nonrecourse liabilities EPD allocates to you also figures in.  In accounting for future suspended losses, you no longer have capital at risk, which means form 6198 enters into your return.  Changes in nonrecourse allocations from year to year will need to be watched.  When you sell, making sure Ordinary Income matches with the changes in your allowed suspended losses may or may not be reflected in the K-1.  All-in-all, a mess which I'm not fluent enough to walk anyone through.   You do have two options to at least keep the problem from continuing into 2021: Buy more EPD, since any purchase will increase your capital account.  You'd have to buy enough to get back above 0, and hopefully keep you above 0 for a while. Sell all of EPD, and then buy back in 31 days (to avoid a wash sale).  That will close out all the calculations for your current holding, and allow you to start fresh assuming you still want to hold EPD. ... View more

@GBL44I've approached this in two steps.  First, when one of the subsidiaries disappears ("oldsub"), you fill out TT to reflect that the "partnership has ended", but that disposition "was not via a sale".  That triggers TT to stop prompting you for future K-1s, but leaves oldsub's suspended losses in limbo.   Second, in the following year, when entering the data for ET you'll get to the question about carrying over prior year losses.  TT will fill that automatically by grabbing last year's figures, but you can change that entry.  That's where I just add in the suspended losses from oldsub.  They're not part of ET.  Then I delete the oldsub K-1. ... View more

@TheHeurist-- With MLPs, the broker isn't reporting the cost basis to the IRS so adjustments are straightforward and aren't likely to generate questions.  In your case you're better off having the broker correct the 1099-B if they reported an incorrect cost basis.  Then there's nothing to adjust, or to explain the the IRS.   As to handling this in the interview, just enter 0 for proceeds and cost in the K-1 interview:  you report the Cap Gain in the 1099-B section, and the other K-1 stuff in the K-1 sections. ... View more