Amend for $1? [Poll] [Fix tax return, Schedule K-1]

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills

Would you amend in this circumstance?

Yes -- head off the audit, and get my buck back.
5
11%
No -- not worth the trouble, and an audit is unlikely.
42
89%
 
Total votes : 47

Amend for $1? [Poll] [Fix tax return, Schedule K-1]

Postby archbish99 » Mon Mar 11, 2013 9:51 pm

Working on my parents' taxes, and since I didn't take over their portfolio until partway through 2012, it contains a couple of publicly-traded partnerships that Dad held early in the year which sent K-1s. We filed last night, thinking we had all of them, and today received two more.

Punched them into TurboTax as an amended return, and it says they're due $1 back from the additional forms. $1 by itself is not worth amending to get back -- since you can't e-file, we'll spend half that on the postage and the other half on paper and ink. My question is whether we're inviting an audit for having a return filed without these K-1s.

(Of course, we wouldn't amend immediately either way -- we'll wait to see if more forms show up, and to give the IRS time to work through the first return. But should we ever amend it just for this?)

Anyone have any experience/thoughts here?
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Re: Amend for $1? [Poll] [Fix tax return, Schedule K-1]

Postby trudy » Mon Mar 11, 2013 11:27 pm

I read up on K-1s. How is it that they don't know how many they can expect to get?
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Re: Amend for $1? [Poll] [Fix tax return, Schedule K-1]

Postby archbish99 » Tue Mar 12, 2013 12:03 am

Dad's investing was... erratic. He traded a lot of "stocks," and didn't know that several of them were actually shares in publicly-traded partnerships. While I could go back and get the list of everything he traded in 2012, I'm not sure how to quickly determine which of those are PTPs either. It's not an investment I've ever dealt with.

Most of them were held for a few days and were resold with minimal capital change, if any, so he doesn't even remember the majority. (This brings us back to why he's not managing their investments now.)
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Re: Amend for $1? [Poll] [Fix tax return, Schedule K-1]

Postby happymob » Tue Mar 12, 2013 5:30 am

archbish99 wrote:Dad's investing was... erratic. He traded a lot of "stocks," and didn't know that several of them were actually shares in publicly-traded partnerships. While I could go back and get the list of everything he traded in 2012, I'm not sure how to quickly determine which of those are PTPs either. It's not an investment I've ever dealt with.

Most of them were held for a few days and were resold with minimal capital change, if any, so he doesn't even remember the majority. (This brings us back to why he's not managing their investments now.)

Yeah, I've been through that. Invested in what looked like a regular ETF, but turned out to be something that generated a K1 (in one case after April 15th), rather than the standard brokerage forms. Really annoying to deal with and I can't say I have any good advice for you.
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Re: Amend for $1? [Poll] [Fix tax return, Schedule K-1]

Postby Bill M » Tue Mar 12, 2013 8:48 am

What might be more important than the $1 refund is the passive loss carryover. If any of those K-1 forms had values to put on form 8582 for carryover into future years, it might be worth filing the 1040X even without the refund. Otherwise, I'd let the IRS catch the missing K-1s, and have the audit result be a $1 refund.
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Re: Amend for $1? [Poll] [Fix tax return, Schedule K-1]

Postby SeattleCPA » Tue Mar 12, 2013 9:45 am

For what it's worth (just casting my "vote") I agree with Bill M.
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Re: Amend for $1? [Poll] [Fix tax return, Schedule K-1]

Postby Grandpaboys » Tue Mar 12, 2013 12:13 pm

I do not like loose ends when it comes to the IRS. I would amend the return rather than have it come up several years from now, not knowing what penalties or interest the IRS can apply. Just dealing with an audit can be time consuming. I would sleep better just knowing everything has been fixed. Better fixed now than later.
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Re: Amend for $1? [Poll] [Fix tax return, Schedule K-1]

Postby MnD » Tue Mar 12, 2013 12:34 pm

I've filed a few years where I received an amended 1099 in mid-late March after filing.
The amount of income changed was always less than $50 (both directions) and I did not amend.
No letters or other IRS issues so their must be a threshold level below which the IRS does not bother with it.

I did finally learn not to file until early April........
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Re: Amend for $1? [Poll] [Fix tax return, Schedule K-1]

Postby Epsilon Delta » Tue Mar 12, 2013 3:01 pm

If I decided to amend I would wait until October, so I would not have to amend twice if something else comes out of the woodwork.
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Re: Amend for $1? [Poll] [Fix tax return, Schedule K-1]

Postby pshonore » Tue Mar 12, 2013 7:00 pm

Not sure I would amend the return but I would make sure that your software had all the latest values for the K1. i would also check because the situation you describe is very unusual for PTPS. Is there a positive number in Box 10 (Section 1231 gain)? Losses from one PTP cannot offset lncome for another so in effect only positive numbers get used.
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Re: Amend for $1? [Poll] [Fix tax return, Schedule K-1]

Postby 2beachcombers » Wed Mar 13, 2013 5:22 pm

Make sure these are all from taxable accounts. Look for UBTI, code V. also for deferred accounts.
So far i have received 3 MLP's this year and all UBTI's are negative.

In deferred accounts, the sum of the UBTI's has to be greater than $1000 to be taxable

.http://www.ehow.com/how_5873375_report- ... count.html

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Re: Amend for $1? [Poll] [Fix tax return, Schedule K-1]

Postby VTXVX » Wed Mar 13, 2013 5:31 pm

Delete
Last edited by VTXVX on Sun Jun 22, 2014 8:37 pm, edited 2 times in total.
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Re: Amend for $1? [Poll] [Fix tax return, Schedule K-1]

Postby pshonore » Wed Mar 13, 2013 7:52 pm

2beachcombers wrote:Make sure these are all from taxable accounts. Look for UBTI, code V. also for deferred accounts.
So far i have received 3 MLP's this year and all UBTI's are negative.

In deferred accounts, the sum of the UBTI's has to be greater than $1000 to be taxable

.http://www.ehow.com/how_5873375_report- ... count.html

jerry

Its actually in Box 20. It's reported for all accounts, both taxable and tax deferred but has no meaning in a taxable account. If by some chance you have more than 1K of UBTI in a tax deferred account, the custodian is supposed to file a 990T tax return and pay any resulting tax with funds from your IRA. Some custodians (Schwab) are quite diligent about it, but others disavow any knowledge.
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Re: Amend for $1? [Poll] [Fix tax return, Schedule K-1]

Postby 2beachcombers » Thu Mar 14, 2013 8:22 am

pshonore--Thanks for the clarification.

jerry
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Re: Amend for $1? [Poll] [Fix tax return, Schedule K-1]

Postby archbish99 » Thu Mar 14, 2013 1:11 pm

pshonore wrote:Not sure I would amend the return but I would make sure that your software had all the latest values for the K1. i would also check because the situation you describe is very unusual for PTPS. Is there a positive number in Box 10 (Section 1231 gain)? Losses from one PTP cannot offset lncome for another so in effect only positive numbers get used.


Can you be clearer about what is unusual, specifically? Owing very little because of an additional K-1, or...?
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Re: Amend for $1? [Poll] [Fix tax return, Schedule K-1]

Postby pshonore » Sat Mar 16, 2013 11:28 am

Generally you can not deduct a loss for an MLP until you sell your complete interest. Because of that, inputting a single K1 doesn't reduce tax and increase your refund. Howver if the MLP reports Section 1231 gain (not unusual) and you have prior years carry forward passive loss that can be freed up to offset that gain, that Section 1231 gain winds on Form 4797 and can itself be offset on Sched D by other "normal" Capital Losses. At least thats how I remember it from a few years back but my memory is quite fuzzy on that. The offset winds up on Sched E, the Sec 1231 gain on Sched D (eventually) as do other Cap Losses or the carry over Cap Losses.

I'll have to try to simulate that in Turbo Tax and see if I can recreate that situation.
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Re: Amend for $1? [Poll] [Fix tax return, Schedule K-1]

Postby archbish99 » Sat Mar 16, 2013 6:02 pm

Again, these are MLPs that my father owned for, literally, days in most cases. (Found one where he held it for five weeks.) There was negligible income or loss in that time, and no ownership interest persisted into 2013. Or April 2012, for that matter. Only one had an ownership interest in 2011, and it was disposed of in January.
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Re: Amend for $1? [Poll] [Fix tax return, Schedule K-1]

Postby pshonore » Sat Mar 16, 2013 10:38 pm

Be sure to carefully check the Sales Schedules enclosed with the K1 for taxation of any sales.
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