MLP Taxation Confusion [Master Limited Partnership]

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aburntoutcase
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MLP Taxation Confusion [Master Limited Partnership]

Post by aburntoutcase » Tue Mar 13, 2018 1:14 pm

This is the first time I sold a publicly traded MLP (APU) and am struggling to understand the taxation while working on my tax return in Turbo Tax Online. I don't think TurboTax is handling the sale correctly. It just takes my cost basis from the 1099 detail it downloads from Vanguard and computes capital gains off of that. However for MLPs, the basis should be impacted by distributions and so it will be lower.

I held APU for just over a year from Feb 2016 to Feb 2017, during which time I received a total of ~$4K in distributions (which reflect reinvestment of all distributions). However the K-1 form is showing a total of ~$10K in cumulative adjustments to cost basis, which is $6K higher than I expected. It seems to match roughly (but not exactly) the aggregate total of the decrease in partner's capital in Part II section L of the Form 1065.

If I follow the math it implies that my cost basis should be reduced from the $40K that represents my purchase price to $30K and I should pay ordinary income tax rate on $10K. However I don't understand economic rationale for that as I only received $4K in distributions. I will also be paying LTCG tax on the difference between my sales proceeds of $53K and $40K, which is a capital gains of $13K. It seems like I shouldn't have to pay tax on more than $4K + $13K = $17K, but the K-1 form seems to imply I should pay tax on $10K + $13K or $23K.

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Re: MLP Taxation Confusion

Post by Shallowpockets » Tue Mar 13, 2018 5:35 pm

Whew! Good luck here. I had some MLP stocks in the past and, never again. Taxes with them when sold is a mess. I believe they are allowed to pass through proceeds without paying the taxes upfront. OK if you hold it, a mess if you sell it.
I had a very very hard time figuring it all out and in the end I just winged it as best I could and sent it in. Have not heard from IRS.
Since then I have never considerd buying an MLP. This tax mess is why they have such good dividend yields. You pay later.

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Re: MLP Taxation Confusion

Post by aburntoutcase » Tue Mar 13, 2018 5:45 pm

Shallowpockets wrote:
Tue Mar 13, 2018 5:35 pm
Since then I have never considerd buying an MLP. This tax mess is why they have such good dividend yields. You pay later.
I am beginning to think the same.

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Re: MLP Taxation Confusion

Post by aburntoutcase » Tue Mar 13, 2018 5:56 pm

aburntoutcase wrote:
Tue Mar 13, 2018 1:14 pm
I held APU for just over a year from Feb 2016 to Feb 2017, during which time I received a total of ~$4K in distributions (which reflect reinvestment of all distributions). However the K-1 form is showing a total of ~$10K in cumulative adjustments to cost basis, which is $6K higher than I expected. It seems to match roughly (but not exactly) the aggregate total of the decrease in partner's capital in Part II section L of the Form 1065.
One clarification. I checked the math and if I look at Part III of the Form 1065 in the K-1 and add up box 1 (ordinary business income/loss), box 5 (interest income), and box 10 (net section 1231 gain/loss) as a proxy for what is shown on Part II as Capital increase/decrease and then add to that the distributions reported on box 19, it does *exactly* match the "cumulative adjustments to cost basis" shown on the Sales Schedule page of the K-1.

However this implies that I should not only be paying the tax on the distributions that was deferred and the 1099-B capital gains, but it is inflating the total gains I have by saying that I should pay tax on another ~$6K of gains, some of which is taxed at LTCG and some of which will be taxed at ordinary income rates.

I am not understanding where the economic basis to tax additional $6K of taxable income has been created - I think the net loss reported by the MLP is being somehow turned into a tax liability for me the way the mechanics of the cost basis adjustment is working.

APU is a pretty well known publicly traded MLP with positive annual GAAP Net Income so not understand the tax loss to begin with and even if there is a loss why is it creating an additional tax liability for me instead of a tax shield?

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Re: MLP Taxation Confusion

Post by Hockey10 » Tue Mar 13, 2018 5:57 pm

I owned an MLP once and would never buy one again, because of the taxes. After I sold it and filed the final tax return, I felt a great sense of relief.

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Re: MLP Taxation Confusion

Post by Good Listener » Tue Mar 13, 2018 6:08 pm

Investment rule number 1: never buy anything that has a K1 form.

Investment rule number 2: never buy anything that has a K1 form.

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Re: MLP Taxation Confusion [Master Limited Partnership]

Post by LadyGeek » Tue Mar 13, 2018 7:15 pm

This thread is now in the Personal Finance (Not Investing) forum (taxes). I also retitled the thread to help with the acronym.

The wiki has some background info: Master limited partnership
Wiki To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.

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Re: MLP Taxation Confusion [Master Limited Partnership]

Post by MarkNYC » Tue Mar 13, 2018 7:29 pm

Your original basis is increased by any income items on the K-1s, and is decreased by any loss or deduction items on the K-1s as well as any distributions received. The losses on the K-1s are generally not deductible until the year of sale, so be sure to indicate on your tax program input that 2017 is the "final year" for the activity. This will likely generate an ordinary loss on Schedule E, probably close to the $6k difference you are looking for.

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Re: MLP Taxation Confusion [Master Limited Partnership]

Post by aburntoutcase » Tue Mar 13, 2018 9:15 pm

MarkNYC wrote:
Tue Mar 13, 2018 7:29 pm
Your original basis is increased by any income items on the K-1s, and is decreased by any loss or deduction items on the K-1s as well as any distributions received. The losses on the K-1s are generally not deductible until the year of sale, so be sure to indicate on your tax program input that 2017 is the "final year" for the activity. This will likely generate an ordinary loss on Schedule E, probably close to the $6k difference you are looking for.
I think that is what is happening, but you are saying that the same losses which reduce my cost basis can also be used as a separate capital loss so that economic impact in terms of tax liability is neutral? If so why do the losses reduce cost basis in the first place?

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Re: MLP Taxation Confusion [Master Limited Partnership]

Post by aburntoutcase » Tue Mar 13, 2018 9:28 pm

LadyGeek wrote:
Tue Mar 13, 2018 7:15 pm
This thread is now in the Personal Finance (Not Investing) forum (taxes). I also retitled the thread to help with the acronym.

The wiki has some background info: Master limited partnership
The wiki had a link to a great article on Forbes that explained the concepts very well. I understand now why the cost basis is lower than I thought but how it doesn't have a net impact on the capital gains because the same loss that was used to lower my basis can also be claimed as a capital loss and will reduce my gains.

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Re: MLP Taxation Confusion

Post by adamthesmythe » Tue Mar 13, 2018 9:51 pm

Good Listener wrote:
Tue Mar 13, 2018 6:08 pm
Investment rule number 1: never buy anything that has a K1 form.

Investment rule number 2: never buy anything that has a K1 form.
With you guys all the way. I inherited a position in one and not having them sell and send me the cash was a big mistake. I've finally sold it.

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Re: MLP Taxation Confusion [Master Limited Partnership]

Post by pshonore » Tue Mar 13, 2018 10:28 pm

aburntoutcase wrote:
Tue Mar 13, 2018 9:15 pm
MarkNYC wrote:
Tue Mar 13, 2018 7:29 pm
Your original basis is increased by any income items on the K-1s, and is decreased by any loss or deduction items on the K-1s as well as any distributions received. The losses on the K-1s are generally not deductible until the year of sale, so be sure to indicate on your tax program input that 2017 is the "final year" for the activity. This will likely generate an ordinary loss on Schedule E, probably close to the $6k difference you are looking for.
I think that is what is happening, but you are saying that the same losses which reduce my cost basis can also be used as a separate capital loss so that economic impact in terms of tax liability is neutral? If so why do the losses reduce cost basis in the first place?
Any loss that was disallowed (Box 1 loss/ Section 1231 loss) can be used to offset regular income when you sell. Turbo Tax will do this automatically if you tell it a final sale occurred. It should all show up on Schedule E with the ordinary income going on Form 4797, and if I recall correctly, the Section 1231 loss will show up on Sched D. And you'll usually have a CG Gain/Loss (the difference between total gain (sale proceeds minus adjusted basis) and Ordinary gain. The net result is you generally get taxed on the distributions when you sell at ordinary income rates. However, I'm not sure if the online version handles MLPs correctly. It did not in the past. The CD/download version definitely does handle them.

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Re: MLP Taxation Confusion [Master Limited Partnership]

Post by HAF-VA » Wed Mar 14, 2018 8:11 am

Warning - this is a general overview and I'm not listing all the tax technical complications. MLPs (and partnerships in general) have great tax attributes but come with some complications. For example, in partnerships, you get return of basis first. If you buy a stock and it pays a dividend, you have dividend income. If you buy a partnership and it pays you a distribution it reduces your basis. The difference is that earnings of the partnership (on the K-1) increase your basis but are taxed as income to you. The flip is partially true. Losses reduce your basis (which is what happened to you). However, the "passive activity loss rules" limit you from using these losses against your ordinary income unless you sell all of your partnership interest. So if your partnership interest in year one has losses of 10k and a distribution of 4k, your basis goes down 14k. You are not taxed on the 4k (return of basis) and the 10k is suspended passive activity losses which you can use against future partnership income or against ordinary income on your return if you sell all of your interest in this partnership. If you play this out many years, and your basis gets to zero, then any distributions in excess of basis are taxed as capital gains.

When you sell ALL of your interest in this MLP, you can use the suspended passive losses. Do note that some of the losses probably reported over the years were from accelerated depreciation and you'll have recapture of some of that which will generate more ordinary income in the year of sale (IRC sections 1245, 1250).

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Re: MLP Taxation Confusion [Master Limited Partnership]

Post by aburntoutcase » Wed Mar 14, 2018 8:51 am

pshonore wrote:
Tue Mar 13, 2018 10:28 pm
Any loss that was disallowed (Box 1 loss/ Section 1231 loss) can be used to offset regular income when you sell. Turbo Tax will do this automatically if you tell it a final sale occurred. It should all show up on Schedule E with the ordinary income going on Form 4797, and if I recall correctly, the Section 1231 loss will show up on Sched D. And you'll usually have a CG Gain/Loss (the difference between total gain (sale proceeds minus adjusted basis) and Ordinary gain. The net result is you generally get taxed on the distributions when you sell at ordinary income rates. However, I'm not sure if the online version handles MLPs correctly. It did not in the past. The CD/download version definitely does handle them.
I am using the online version and when I told it I had un-utilized passive activity losses from prior year and that I had sold off partnership interest it did prompt we for the details on last years K-1 and details of sale. I will check the underlying tax forms to make sure it is calculating correctly. I believe last year TurboTax online did not support K-1 forms as I had to use desktop version and import prior return into online.

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Re: MLP Taxation Confusion [Master Limited Partnership]

Post by pshonore » Wed Mar 14, 2018 10:10 am

HAF-VA wrote:
Wed Mar 14, 2018 8:11 am
Warning - this is a general overview and I'm not listing all the tax technical complications. MLPs (and partnerships in general) have great tax attributes but come with some complications. For example, in partnerships, you get return of basis first. If you buy a stock and it pays a dividend, you have dividend income. If you buy a partnership and it pays you a distribution it reduces your basis. The difference is that earnings of the partnership (on the K-1) increase your basis but are taxed as income to you. The flip is partially true. Losses reduce your basis (which is what happened to you). However, the "passive activity loss rules" limit you from using these losses against your ordinary income unless you sell all of your partnership interest. So if your partnership interest in year one has losses of 10k and a distribution of 4k, your basis goes down 14k. You are not taxed on the 4k (return of basis) and the 10k is suspended passive activity losses which you can use against future partnership income or against ordinary income on your return if you sell all of your interest in this partnership. If you play this out many years, and your basis gets to zero, then any distributions in excess of basis are taxed as capital gains.

When you sell ALL of your interest in this MLP, you can use the suspended passive losses. Do note that some of the losses probably reported over the years were from accelerated depreciation and you'll have recapture of some of that which will generate more ordinary income in the year of sale (IRC sections 1245, 1250).
You can also use the suspended loss against future income for the same MLP. So if you have a loss in year 1, it gets suspended. If you have Box 1 earnings in Yr 2, you can use the suspended loss to offset that income. My understanding is on a partial sale, you can also use suspended losses up to the amount of gain.

If your cap account gets to $0 you may still have basis from non-recourse debt assigned to you which can be used to delay paying CG taxes on the distributions. Note that gets very complicated (as do partial sales). Another way to reduce this risk would be to reinvest distributions which of course increases your basis

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Re: MLP Taxation Confusion [Master Limited Partnership]

Post by pshonore » Wed Mar 14, 2018 10:38 am

Forgot to mention you have adjust the basis of any CG/L on Sched D. Don't use the broker number.

Example you paid $5K for the units and sold then for $10K. K1 Sales Schedule supplies Basis adjustment of -$3.5K, Ordinary gain of $3K.

Adjusted basis = 5K - 3.5K = 1.5K ; Tot gain = 10K - 1.5 = 8.5K; Tot gain - Ordinary gain = cap gain; 8.5K - 3K = 4.5K cap gain

Basis for cap gain = $10K - 4.5K = 5.5K on Sched D. Sale proceeds are $10K

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Re: MLP Taxation Confusion [Master Limited Partnership]

Post by aburntoutcase » Wed Mar 21, 2018 12:01 pm

Should I be checking the "All of my investment activity" is at risk box in Turbo Tax for a publicly traded MLP? The definition doesn't seem to be clear to me. On one hand it appears that only GPs should be checking this box and not LPs, but on the other my investment as a LP is at risk of loss.

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Re: MLP Taxation Confusion [Master Limited Partnership]

Post by aburntoutcase » Wed Mar 21, 2018 12:14 pm

I had 3 publicly traded MLPs (APU, BPL, EPD) where I sold my shares in 2017. APU and BPL were complete dispositions and I am comfortable with how TurboTax is handling the cost basis on Schedule D. However for EPD I am not sure.

I had a complete disposition of shares I acquired in 2016 in August 2017, but then in November 2017 I established a new position in EPD and did not sell those shares. The cost basis used for EPD on Schedule D seems higher than what it should be looking on the sales worksheet on the K-1 form. I made sure to only check "partial disposition" on the TurboTax screen prompt. I don't understand how TurboTax is calculating a partnership basis for the shares sold that is higher than that implied by the capital gains on the K-1 form.

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Re: MLP Taxation Confusion [Master Limited Partnership]

Post by pshonore » Wed Mar 21, 2018 1:34 pm

aburntoutcase wrote:
Wed Mar 21, 2018 12:14 pm
I had 3 publicly traded MLPs (APU, BPL, EPD) where I sold my shares in 2017. APU and BPL were complete dispositions and I am comfortable with how TurboTax is handling the cost basis on Schedule D. However for EPD I am not sure.

I had a complete disposition of shares I acquired in 2016 in August 2017, but then in November 2017 I established a new position in EPD and did not sell those shares. The cost basis used for EPD on Schedule D seems higher than what it should be looking on the sales worksheet on the K-1 form. I made sure to only check "partial disposition" on the TurboTax screen prompt. I don't understand how TurboTax is calculating a partnership basis for the shares sold that is higher than that implied by the capital gains on the K-1 form.
Partnership basis has no relation to cap gain. Of course its part of the calculation, but your basis could be $x with a huge cap gain or with a negative cap gain because Ordinary income is also part of the equation. Are you sure TT is calculating the basis and putting on Sched D? That would be a first since they don't have the necessary details to do it in the past. Or is that number coming from a 1099B? One of my previous posts (a few back) shows how to calculate the basis for the Cap Gain/Loss. The basis will be never what you paid for it (unless you bought and sold in the same month and received no distributions). Another glitch is the partnership knows when you bought it but not necessarily what you paid so they use an average price.

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Re: MLP Taxation Confusion [Master Limited Partnership]

Post by aburntoutcase » Wed Mar 21, 2018 1:45 pm

pshonore wrote:
Wed Mar 21, 2018 1:34 pm
Partnership basis has no relation to cap gain. Of course its part of the calculation, but your basis could be $x with a huge cap gain or with a negative cap gain because Ordinary income is also part of the equation. Are you sure TT is calculating the basis and putting on Sched D? That would be a first since they don't have the necessary details to do it in the past. Or is that number coming from a 1099B? One of my previous posts (a few back) shows how to calculate the basis for the Cap Gain/Loss. The basis will be never what you paid for it (unless you bought and sold in the same month and received no distributions). Another glitch is the partnership knows when you bought it but not necessarily what you paid so they use an average price.
Maybe I used the term partnership basis incorrectly, what I meant is cost basis for calculating capital gains on Schedule D. To be clear I am pretty sure that TurboTax is calculating the cost basis for Schedule D correctly because the cost basis is *lower* than that shown on my 1099B and the capital gains implied exactly match what would be the result if I were to subtract the indicated Ordinary Gain on the K-1 from the Total Gain that results after the adjustment to cost basis shown on the K-1 form. My spreadsheet calculations based on the K-1 form match exactly how TurboTax has populated the Schedule D for APU and BPL. Where they don't match is for EPD (which is the one I had a complete sale followed by another buy in the same year).

UPDATE:
I found the source of the discrepancy for EPD, it was manual error on my part. Still not sure if I should be checking the "Investment is at Risk" box or not. TurboTax seems to use that to decide whether it is a passive or non-passive loss on Schedule E. Ultimately it calculates the correct total loss, but would like to know which is more accurate.

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Re: MLP Taxation Confusion [Master Limited Partnership]

Post by aburntoutcase » Wed Mar 21, 2018 4:20 pm

Another thing I noticed that for the two MLPs with passive activity losses carried over from 2016 that could be utilized in 2017 now that they are completely disposed off, TurboTax is putting the losses in the Nonpassive loss column on Schedule E. That seems surprising to me, I would have thought they would go in the Passive loss column. Total loss on Schedule E is not impacted, so it doesn't influence my tax liability but I would prefer not to knowingly turn in an incorrect record.

UPDATE:
Turns out that selecting "Partnership ended in 2017" instead of "Disposed of portion of partnership interest" will result in above phenomenon, I switched to latter choice to ensure the losses were put in passive column on Schedule E.

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Re: MLP Taxation Confusion [Master Limited Partnership]

Post by Cuzz35 » Wed Mar 21, 2018 9:03 pm

aburntoutcase wrote:
Wed Mar 21, 2018 4:20 pm
Another thing I noticed that for the two MLPs with passive activity losses carried over from 2016 that could be utilized in 2017 now that they are completely disposed off, TurboTax is putting the losses in the Nonpassive loss column on Schedule E. That seems surprising to me, I would have thought they would go in the Passive loss column. Total loss on Schedule E is not impacted, so it doesn't influence my tax liability but I would prefer not to knowingly turn in an incorrect record.

UPDATE:
Turns out that selecting "Partnership ended in 2017" instead of "Disposed of portion of partnership interest" will result in above phenomenon, I switched to latter choice to ensure the losses were put in passive column on Schedule E.
The software was doing it right. Since you completely disposed if your interest, all the losses are allowed regardless if they are passive or not. So they get treated as non-passive losses.

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Re: MLP Taxation Confusion [Master Limited Partnership]

Post by aburntoutcase » Wed Mar 21, 2018 9:16 pm

Cuzz35 wrote:
Wed Mar 21, 2018 9:03 pm
aburntoutcase wrote:
Wed Mar 21, 2018 4:20 pm
Another thing I noticed that for the two MLPs with passive activity losses carried over from 2016 that could be utilized in 2017 now that they are completely disposed off, TurboTax is putting the losses in the Nonpassive loss column on Schedule E. That seems surprising to me, I would have thought they would go in the Passive loss column. Total loss on Schedule E is not impacted, so it doesn't influence my tax liability but I would prefer not to knowingly turn in an incorrect record.

UPDATE:
Turns out that selecting "Partnership ended in 2017" instead of "Disposed of portion of partnership interest" will result in above phenomenon, I switched to latter choice to ensure the losses were put in passive column on Schedule E.
The software was doing it right. Since you completely disposed if your interest, all the losses are allowed regardless if they are passive or not. So they get treated as non-passive losses.
I could be wrong, but I don't think it was an issue of whether or not losses were allowed or not, it was about whether they should be put in passive or nonpassive column. I think selecting "Partnership ended in 2017" has a very different meaning to TurboTax and it puts the losses in nonpassive column (still roll into total loss figure in Schedule E). I have now selected "Disposed of portion of partnership interest" and it puts the losses in passive column (also still roll into total loss figure in Schedule E).

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Re: MLP Taxation Confusion [Master Limited Partnership]

Post by Cuzz35 » Wed Mar 21, 2018 9:46 pm

aburntoutcase wrote:
Wed Mar 21, 2018 9:16 pm
Cuzz35 wrote:
Wed Mar 21, 2018 9:03 pm
aburntoutcase wrote:
Wed Mar 21, 2018 4:20 pm
Another thing I noticed that for the two MLPs with passive activity losses carried over from 2016 that could be utilized in 2017 now that they are completely disposed off, TurboTax is putting the losses in the Nonpassive loss column on Schedule E. That seems surprising to me, I would have thought they would go in the Passive loss column. Total loss on Schedule E is not impacted, so it doesn't influence my tax liability but I would prefer not to knowingly turn in an incorrect record.

UPDATE:
Turns out that selecting "Partnership ended in 2017" instead of "Disposed of portion of partnership interest" will result in above phenomenon, I switched to latter choice to ensure the losses were put in passive column on Schedule E.
The software was doing it right. Since you completely disposed if your interest, all the losses are allowed regardless if they are passive or not. So they get treated as non-passive losses.
I could be wrong, but I don't think it was an issue of whether or not losses were allowed or not, it was about whether they should be put in passive or nonpassive column. I think selecting "Partnership ended in 2017" has a very different meaning to TurboTax and it puts the losses in nonpassive column (still roll into total loss figure in Schedule E). I have now selected "Disposed of portion of partnership interest" and it puts the losses in passive column (also still roll into total loss figure in Schedule E).
My point was that after you dispose of a passive activity in a fully taxable transaction any passive losses that would otherwise be suspended are treated as non-passive. The software is doing it correctly when you check the box that you fully disposed of the activities.

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Re: MLP Taxation Confusion [Master Limited Partnership]

Post by aburntoutcase » Thu Mar 22, 2018 1:13 pm

Cuzz35 wrote:
Wed Mar 21, 2018 9:46 pm

My point was that after you dispose of a passive activity in a fully taxable transaction any passive losses that would otherwise be suspended are treated as non-passive. The software is doing it correctly when you check the box that you fully disposed of the activities.
I think the losses are still passive, it is just that now they can be used on the Schedule E. Turbotax marked them as passive in Schedule E when I selected the "disposed portion of holdings" instead of "partnership ended". It is aware that there was a full disposition.

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Re: MLP Taxation Confusion [Master Limited Partnership]

Post by b4real » Thu Mar 22, 2018 5:08 pm

https://investors.amerigas.com/investor ... fault.aspx
Enter the info from your K-1 package into the turbotax K-1 section.

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Re: MLP Taxation Confusion [Master Limited Partnership]

Post by Cuzz35 » Fri Mar 23, 2018 7:39 am

aburntoutcase wrote:
Thu Mar 22, 2018 1:13 pm
Cuzz35 wrote:
Wed Mar 21, 2018 9:46 pm

My point was that after you dispose of a passive activity in a fully taxable transaction any passive losses that would otherwise be suspended are treated as non-passive. The software is doing it correctly when you check the box that you fully disposed of the activities.
I think the losses are still passive, it is just that now they can be used on the Schedule E. Turbotax marked them as passive in Schedule E when I selected the "disposed portion of holdings" instead of "partnership ended". It is aware that there was a full disposition.
A partial disposition does not allow you to fully deduct your passive losses without passive income. Thus, turbo tax puts it in the passive column. If you fully disposed of your interest the losses that would otherwise be suspended are non-passive.

IRC 469(g) Dispositions of entire interest in passive activityIf during the taxable year a taxpayer disposes of his entire interest in any passive activity (or former passive activity), the following rules shall apply:
(1) Fully taxable transaction
(A) In generalIf all gain or loss realized on such disposition is recognized, the excess of—
(i) any loss from such activity for such taxable year (determined after the application of subsection (b)), over
(ii) any net income or gain for such taxable year from all other passive activities (determined after the application of subsection (b)),
shall be treated as a loss which is NOT FROM A PASSIVE ACTIVITY.

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Re: MLP Taxation Confusion [Master Limited Partnership]

Post by aburntoutcase » Fri Mar 23, 2018 11:54 am

Cuzz35 wrote:
Fri Mar 23, 2018 7:39 am
A partial disposition does not allow you to fully deduct your passive losses without passive income. Thus, turbo tax puts it in the passive column. If you fully disposed of your interest the losses that would otherwise be suspended are non-passive.
It is not a partial disposition in reality. It is just that the TT software allows only two user interface choices: "Partnership Ended" or "I sold a portion of ...". Partnership ended is not really a correct choice. TT knows that my investment in the MLPs is down to zero and has correctly calculated my capital gains, ordinary income, losses on Schedule E. It wouldn't have allowed my losses on schedule E if it what you say was correct. The actual column on schedule E is "Passive loss allowed".

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