Where do I account for the sale of MLP's

Where do I enter the sale of MLP's? It appears I can use the broker statement (1099-B) or the K-1 (indicating that I have sold the MLP and answer the questions). First I have used the broker statement, but when I fill out the K-1 entry questions my gains and/or losses are double counted in Turbo Tax. What is the proper way to do this? Do I have to use the K-1 and ignore the 1099-B? I also have trouble accounting for the short or long gains(losses) in the TT K-1 entries. Do I have to use the form view for this?
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    Hi Michaeleasy
    I just went thru the same problem. To me the clear answer is to delete the information from the "stocks section" and fill out the K1 interview completely. All the information is going to flow thru to the correct forms, including 8949 (box C) and on to schedule D. The numbers worked perfectly for my 3 MLP sales; when I tried without deleting them they were counted twice.
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    The 1099B must be entered as Capital Gains on form 8949 and Schedule D. The K-1 should have your share of the other partnership incomes. You have gain/loss on sale of asset and the income from ownership.
    • mr.phil thanks for your help. Does this mean that I will have to edit form 8949 (adjustment to basis) and Schedule D on the form option (manually) using the "2011 sales schedule" data from the K-1?
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    I hope the IRS is smart enough because I have the same problem.  I input the 1099-B  which showed up on Line 13 and then when the K-1 came in the mail went through the entire program of questions and it made a new 8949 checking off I did not receive a 1099-B but it's cost basis was correct because I was able to adjust it using the K-1 info that had more adjustments than I knew about as just being the capital distributions.  Then the Recaptured Depreciation which is listed on the sale paperwork as ordinary gain went into line 14  and the rest is the capital gain going into Line 13.  Don't know why I am recapturing depreciation I never took in the first place but I was told by the company I have to. The only way to get rid of the duplicate capital gain was to delete the 1099-B received by the broker that I input.  

    Hope the IRS is smart enough - don't want a letter in the mail.  Using the K-1 I am paying more tax because the 1099-B did not have the full adjustment to the basis the K-1 did so the IRS is making more money on me this way, just not a duplication.  

    Anyone have any other ideas - please help
    • When it comes to taxes, especially K-1s and mlp's...NO one is smart enough..even the IRS and most people you ask a question will give you different 'right' response.
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    Springs1, that "A" is wrong.  Looking at the spreadsheet you take "B".  That info is on the turbo tax article SLN59791 so turbo tax obviously typo'd - a big typo actually.
    • Thanks Micheleaey -- turns out I had missed one of the early interview questions in the K1 section that triggers TT to ask about sale of K1. Once I checked that box, the appropriate questions popped up. But...

      I'm still confused about which basis to use when I'm manually entering my MLP sale in the stocks section of TT (1099B) as coyote's workaround recommends.

      Under the 1099 section, should my basis be my actual purchase cost? Or my adjusted basis (as calculated with the Sales Schedule provided by my MLPs)?

      Thanks,
      Brandon
    • Here is what I did - I follow that same advise that some of you have given - deleted 1099B entery manually from form 8949 which corrected schedule D - and in form 8949 where k-1 entry is recorded with box C checked in part II, I added a comment in description of property saying 'PTP sell also on 1099B" next to where it says ABC company ..
    • I have use turbo tax for years and have been more than satisfied, BUT this K1 / 1099b situation is a major problem.  If you arn"t paying attention you can easily double your tax on any MLP gains.  Since any MLP gain is a return of capital you must enter the K1 data and delete and 1099b information.  Not really a good process especially when turbo tax advertises they will walk you thru the tax process.  Good luck
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    If you have a 1099B with the basis on it no problem. If no basis on 1099b or you need to adjust it, you attract attention. I had a client that had a erroneous basis on a long held position that was transfered to another investment house. I advised him to contact the investment house to get a correct 1099B instead of a manual change. If you manually adjust basis document your action. The IRS will use a "ZERO" if you cant.
    • I have the same problem.  My 1099-B is very thorough and I chose to enter the sale and basis prices from it on Schedule D Fast Entry.

      Unfortunately when you sell an MLP and have the Final K-1, TT asks how you disposed of the MLP.  If you enter the sale price and the basis from the 1099-B you will indeed double up.

      Since I can't reach TT for guidance, I chose to equate the K-1 sale and basis prices which at least eliminated the doubling.  

      I wish there were a better way.
    • It seems that if you use the K1 reporting process it will flow through to the Schedule D, capturing  any capital gains, etc. and the gain or loss from sale of the partnership will end up on line 14 (other gains or losses)of your 1040.   The IRS should be able to figure out that the 1099B partnership sale is the same as the associated K1.
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    http://turbotax.intuit.com/support/iq/Other-Common-Income/Unable-To-Indicate-K-1-Partnership-Disposition-Was-Listed-On-A-1099-B/SLN59791.html

    Unable To Indicate K-1 Partnership Disposition Was Listed On A 1099-B
    Updated: 3/20/2012
    Article ID: SLN59791
    If you have a K-1 Partnership Disposition of Interest that was Reported on a 1099-B.
    There is currently "No" way to indicate in the program that it was reported on a 1099-B.
    Workaround:
    This is a two step process.
    Fist we will edit the K-1.
    Then we will re-enter the Information as a 1099-B to correctly report the information on Form 8949 and your Schedule D.
    To Edit Your K-1
    • Revisit the K-1 interview, and enter "Zero" for your basis and sale price on the "Enter Sales Prices" screen.
    To Enter as a 1099-B
    • Next, visit the Stocks, Mutual Funds, Bonds, Other section  
    • Continue, until you get to the Investment sales Summary
    • Select "Add Another Investment Sale"
    • Select "Enter on a Spreadsheet"
    • Enter you information about your Publicly Traded Partnership Disposition
    • Make sure you answer the question, Reported on a 1099-B Statement?
    • "Select A"
    • (When you enter a K1 it creates a type C (no 1099-B) and that is why when you enter the K1 you can adjust it to a net gain/loss zero, to not double the gain/loss already reported via 1099B)
    • @Coyote Dean:  I tried using the way described and because my MLP has an ordinary gain that reports on a 4797 and the capital gain reporting on the sched. d, when I went in to zero out the K1 info I left the ordinary gain in and so it created a 8949 C and the rest was on the 8949B and when I took it off the k1 interview it deleted the 4797 and removed it from the 1040 where it belonged so I cannot figure out how to get all the numbers in the proper place.  It seems the numbers are off by the amount of the ordinary gain and now I cannot figure out which way is right.  

      Doing it this way, the ordinary gain is  in column f of sched. D and then in column H as a negative number.  It then shows up on the 4797 as a positive number and on a separate line on my 1040.  

      When I do the number the other way, just using the K-1 figures and deleting the 1099-B I have a higher amount on my sched. d by the amount of the ordinary gain.

      When I calculate the amount showing up as capital gain it is wrong - off by the amount of the ordinary gain
    • I too am having trouble figuring out how to enter sale of my MLPs into TT.  But I am also having trouble understanding the various recommendations in this thread.  My K1s don't seem to include information about the sale per se, yet multiple suggestions in this thread suggest entering the sale completely through the K1 interview section.  Any suggestions on how/where I might do that?  The TT K1 section (near the end of the interview) does ask about ordinary gains/capital gains, but under the title "2010 Carryover."  I don't see where I can enter ordinary and capital gains from my 2011 sales.

      I have had good experience with TT over the years, but the lack of clarity and absence of guidance from TT on this particular subject is frustrating.

      Thank you,
      Chasemarmot
    • I figured it out.  I was using a cost basis including the ordinary gain.  Took it out and the figures work.

      Chasemarmot, in your K1 package is a "Sales Schedule".  It will list the Units Disposed in area (1).  Then the Disposition Date in area (2). Sales Proceeds you fill in in area (3), Fill in the Purchase Amount in area (4).  Then they should have already typed in your "Cumulative Adjustments to Basis in Area (5).  This will be a negative number.  You take your Purchase Price + (the negative figure in Line 5) and that is the cost basis.  Then Box (6) is Total Gain/Loss and this is calculated by taking Sales Proceeds in Box 3 Minus your Cost Basis.  Write that number into Box 6.  Box 7 has Ordinary Gain in it.  This is considered Recaptured Depreciation.  Why I don't know because I never had that much depreciation in the first place so don't know why I am recapturing it.  This is what I was told when I phoned the company.  Box 8 is Capital Gain or Loss and this is calculated by taking Box 6 - Box 7.  The number here is what will end up on Sched. D and the number in Box 7 will end up on Form 4797.  

      All this is spelled out on the Sales Schedule that came with the K-1 package

      When you do the adjustments as described by CoyoteDean, go into each form and look at the numbers and calculate yourself what they should be.

      Go to the 1040 and see the figure put into Line 13 and make sure it is correct.  The Ordinary Gain is on Line 14 of 1040.  

      The Schedule D shows the Ordinary Gain in the Box C section Line 10 where all the figures were  before the adjustments were made to put the sales proceeds into a 1099B to show up on the Box B line 9.  It is showing up here in Column F as a positive number adding to my cost basis and then on the last column as a negative number which is taking it back out of the Gain making the Capital Gain then correct.

       The Ordinary Gain then shows up as a positive number on the 4797 showing it came from the K1 and then as a positive number on the 1040 Line 13 as I said above.

      I did not like the way that was looking still having 2 8949's so I went into the 8949 Copy 2 and used override to delete all the entries which then removed the form (tried deleting the form and it kept coming back). Then I took the ordinary gain that was on the second 8949 and added it to my basis (I originally said I took it out to make the numbers work).  Then I checked the schedule D and it looks good, The one copy of the 8949 now looks good, The form 4797 looks good and then check the Part 10 Transaction Summary area of the capital gain worksheet to make sure those figures are right.  

      This has been a real pain in the rear and been working on this for days and working this in several different ways trying to find the best one.
    • CoyoteDean, why select "A" for the question "Reported on a 1099-B statement"?  No basis has been reported to IRS.
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