Sale of MLP Prevents Electronic Filing?

Discussion in 'Tax' started by njoracle, Feb 26, 2011.

  1. njoracle

    njoracle Guest

    I sold some units of a MLP and received a sales schedule from the
    partnership. The sales schedule lets me calculate how much is posted to
    Form 4797 Part II, line 10 and Form 1040 Schedule D for this transaction.

    Because of this sale, I understand I am required to attach an IRC
    Section 751 statement to my filing which states (in part) "The Taxpayer
    has reported ordinary income upon the disposition of units of ...."

    Assuming the above is correct, I see no way of being able to file
    electronically with Turbotax because of the need to attach the above
    statement to the filing. Therefore, I will have to submit a paper
    return. Please someone correct me if I am wrong about any of the above.

    --
    << ------------------------------------------------------- >>
    << The foregoing was not intended or written to be used, >>
    << nor can it used, for the purpose of avoiding penalties >>
    << that may be imposed upon the taxpayer. >>
    << >>
    << The Charter and the Guidelines for submitting posts >>
    << to this newsgroup as well as our anti-spamming policy >>
    << are at www.asktax.org. >>
    << Copyright (2011) - All rights reserved. >>
    << ------------------------------------------------------- >>
     
    njoracle, Feb 26, 2011
    #1
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  2. On Feb 26, 10:57 am, njoracle <> wrote:
    > I sold some units of a MLP and received a sales schedule from the
    > partnership. The sales schedule lets me calculate how much is posted to
    > Form 4797 Part II, line 10 and Form 1040 Schedule D for this transaction.
    >
    > Because of this sale, I understand I am required to attach an IRC
    > Section 751 statement to my filing which states (in part) "The Taxpayer
    > has reported ordinary income upon the disposition of units of ...."
    >
    > Assuming the above is correct, I see no way of being able to file
    > electronically with Turbotax because of the need to attach the above
    > statement to the filing. Therefore, I will have to submit a paper
    > return. Please someone correct me if I am wrong about any of


    I can't speak about Turbotax specifically, but the professional tax
    software I use allows for including statements like that in the
    electronic file.

    --
    << ------------------------------------------------------- >>
    << The foregoing was not intended or written to be used, >>
    << nor can it used, for the purpose of avoiding penalties >>
    << that may be imposed upon the taxpayer. >>
    << >>
    << The Charter and the Guidelines for submitting posts >>
    << to this newsgroup as well as our anti-spamming policy >>
    << are at www.asktax.org. >>
    << Copyright (2011) - All rights reserved. >>
    << ------------------------------------------------------- >>
     
    Tom Healy CPA, Mar 5, 2011
    #2
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  3. njoracle

    D. Stussy Guest

    software - was Re: Sale of MLP Prevents Electronic Filing?

    "Tom Healy CPA" <> wrote in message
    news:...
    > On Feb 26, 10:57 am, njoracle <> wrote:
    > > I sold some units of a MLP and received a sales schedule from the
    > > partnership. The sales schedule lets me calculate how much is posted to
    > > Form 4797 Part II, line 10 and Form 1040 Schedule D for this

    transaction.
    > >
    > > Because of this sale, I understand I am required to attach an IRC
    > > Section 751 statement to my filing which states (in part) "The Taxpayer
    > > has reported ordinary income upon the disposition of units of ...."
    > >
    > > Assuming the above is correct, I see no way of being able to file
    > > electronically with Turbotax because of the need to attach the above
    > > statement to the filing. Therefore, I will have to submit a paper
    > > return. Please someone correct me if I am wrong about any of

    >
    > I can't speak about Turbotax specifically, but the professional tax
    > software I use allows for including statements like that in the
    > electronic file.


    Which software is that? I need the ability to attach "white paper"
    attachments to convert some clients to e-file (who historically have been
    excluded from such).

    --
    << ------------------------------------------------------- >>
    << The foregoing was not intended or written to be used, >>
    << nor can it used, for the purpose of avoiding penalties >>
    << that may be imposed upon the taxpayer. >>
    << >>
    << The Charter and the Guidelines for submitting posts >>
    << to this newsgroup as well as our anti-spamming policy >>
    << are at www.asktax.org. >>
    << Copyright (2011) - All rights reserved. >>
    << ------------------------------------------------------- >>
     
    D. Stussy, Mar 5, 2011
    #3
  4. In article <>,
    Tom Healy CPA <> wrote:
    >On Feb 26, 10:57 am, njoracle <> wrote:
    >> I sold some units of a MLP and received a sales schedule from the
    >> partnership. The sales schedule lets me calculate how much is posted to
    >> Form 4797 Part II, line 10 and Form 1040 Schedule D for this transaction.
    >>
    >> Because of this sale, I understand I am required to attach an IRC
    >> Section 751 statement to my filing which states (in part) "The Taxpayer
    >> has reported ordinary income upon the disposition of units of ...."
    >>
    >> Assuming the above is correct, I see no way of being able to file
    >> electronically with Turbotax because of the need to attach the above
    >> statement to the filing. Therefore, I will have to submit a paper
    >> return. Please someone correct me if I am wrong about any of

    >
    >I can't speak about Turbotax specifically, but the professional tax
    >software I use allows for including statements like that in the
    >electronic file.



    I think the MLP lawyers have gone overboard in telling you to
    attach this statement.
    --

    ArtKamlet at a o l dot c o m Columbus OH K2PZH

    --
    << ------------------------------------------------------- >>
    << The foregoing was not intended or written to be used, >>
    << nor can it used, for the purpose of avoiding penalties >>
    << that may be imposed upon the taxpayer. >>
    << >>
    << The Charter and the Guidelines for submitting posts >>
    << to this newsgroup as well as our anti-spamming policy >>
    << are at www.asktax.org. >>
    << Copyright (2011) - All rights reserved. >>
    << ------------------------------------------------------- >>
     
    Arthur Kamlet, Mar 6, 2011
    #4
  5. Re: software - was Re: Sale of MLP Prevents Electronic Filing?

    On Mar 5, 3:50 pm, "D. Stussy" <>
    wrote:
    > "Tom Healy CPA" <> wrote in messagenews:...
    >


    > > I can't speak about Turbotax specifically, but the professional tax
    > > software I use allows for including statements like that in the
    > > electronic file.

    >
    > Which software is that?  I need the ability to attach "white paper"
    > attachments to convert some clients to e-file (who historically have been
    > excluded from such).
    >


    Probably most do. A few years ago I used UltraTax; it had entries on
    the E Filing screen for "Preparer Notes" and "Regulatory Explanation."
    Essentially these are free-form notes that are part of the electronic
    file. I'm now using CCH Small Firm Services for business returns; the
    individual e-file forms include sections for preparer notes, election
    statements, and regulatory explanations; and there is an Elections/
    Statements form for business returns that is also included in the
    electronic file. Finally, for individual returns I'm using ProSystem
    Fx; as with the others, there's a form in the Electronic Filing
    section for free-form explanations, elections, and preparer notes.

    --
    << ------------------------------------------------------- >>
    << The foregoing was not intended or written to be used, >>
    << nor can it used, for the purpose of avoiding penalties >>
    << that may be imposed upon the taxpayer. >>
    << >>
    << The Charter and the Guidelines for submitting posts >>
    << to this newsgroup as well as our anti-spamming policy >>
    << are at www.asktax.org. >>
    << Copyright (2011) - All rights reserved. >>
    << ------------------------------------------------------- >>
     
    Tom Healy CPA, Mar 6, 2011
    #5
  6. njoracle

    njoracle Guest

    Arthur Kamlet wrote:
    > In article<>,
    > Tom Healy CPA<> wrote:
    >> On Feb 26, 10:57 am, njoracle<> wrote:
    >>> I sold some units of a MLP and received a sales schedule from the
    >>> partnership. The sales schedule lets me calculate how much is posted to
    >>> Form 4797 Part II, line 10 and Form 1040 Schedule D for this transaction.
    >>>
    >>> Because of this sale, I understand I am required to attach an IRC
    >>> Section 751 statement to my filing which states (in part) "The Taxpayer
    >>> has reported ordinary income upon the disposition of units of ...."
    >>>
    >>> Assuming the above is correct, I see no way of being able to file
    >>> electronically with Turbotax because of the need to attach the above
    >>> statement to the filing. Therefore, I will have to submit a paper
    >>> return. Please someone correct me if I am wrong about any of

    >>
    >> I can't speak about Turbotax specifically, but the professional tax
    >> software I use allows for including statements like that in the
    >> electronic file.

    >
    >
    > I think the MLP lawyers have gone overboard in telling you to
    > attach this statement.


    I agree. I will probably just e-file and wait for the IRS to ask me mail
    in the statement if they really want it.

    --
    << ------------------------------------------------------- >>
    << The foregoing was not intended or written to be used, >>
    << nor can it used, for the purpose of avoiding penalties >>
    << that may be imposed upon the taxpayer. >>
    << >>
    << The Charter and the Guidelines for submitting posts >>
    << to this newsgroup as well as our anti-spamming policy >>
    << are at www.asktax.org. >>
    << Copyright (2011) - All rights reserved. >>
    << ------------------------------------------------------- >>
     
    njoracle, Mar 6, 2011
    #6
  7. njoracle

    D. Stussy Guest

    Re: software - was Re: Sale of MLP Prevents Electronic Filing?

    "Tom Healy CPA" <> wrote in message
    news:...
    > On Mar 5, 3:50 pm, "D. Stussy" <>
    > wrote:
    > > "Tom Healy CPA" <> wrote in

    messagenews:
    m...
    > > > I can't speak about Turbotax specifically, but the professional tax
    > > > software I use allows for including statements like that in the
    > > > electronic file.

    > >
    > > Which software is that? I need the ability to attach "white paper"
    > > attachments to convert some clients to e-file (who historically have

    been
    > > excluded from such).
    > >

    >
    > Probably most do. A few years ago I used UltraTax; it had entries on
    > the E Filing screen for "Preparer Notes" and "Regulatory Explanation."
    > Essentially these are free-form notes that are part of the electronic
    > file. I'm now using CCH Small Firm Services for business returns; the
    > individual e-file forms include sections for preparer notes, election
    > statements, and regulatory explanations; and there is an Elections/
    > Statements form for business returns that is also included in the
    > electronic file. Finally, for individual returns I'm using ProSystem
    > Fx; as with the others, there's a form in the Electronic Filing
    > section for free-form explanations, elections, and preparer notes.


    OK, thanks. So, several different packages now support this. I've bitched
    to the IRS every year for the past decade about not accepting "white paper
    attachments" and it was nice of them NOT to tell me that it's now
    supported. :-(

    --
    << ------------------------------------------------------- >>
    << The foregoing was not intended or written to be used, >>
    << nor can it used, for the purpose of avoiding penalties >>
    << that may be imposed upon the taxpayer. >>
    << >>
    << The Charter and the Guidelines for submitting posts >>
    << to this newsgroup as well as our anti-spamming policy >>
    << are at www.asktax.org. >>
    << Copyright (2011) - All rights reserved. >>
    << ------------------------------------------------------- >>
     
    D. Stussy, Mar 6, 2011
    #7
  8. njoracle

    njoracle Guest

    Arthur Kamlet wrote:
    > In article<>,
    > Tom Healy CPA<> wrote:
    >> On Feb 26, 10:57 am, njoracle<> wrote:
    >>> I sold some units of a MLP and received a sales schedule from the
    >>> partnership. The sales schedule lets me calculate how much is posted to
    >>> Form 4797 Part II, line 10 and Form 1040 Schedule D for this transaction.
    >>>
    >>> Because of this sale, I understand I am required to attach an IRC
    >>> Section 751 statement to my filing which states (in part) "The Taxpayer
    >>> has reported ordinary income upon the disposition of units of ...."
    >>>
    >>> Assuming the above is correct, I see no way of being able to file
    >>> electronically with Turbotax because of the need to attach the above
    >>> statement to the filing. Therefore, I will have to submit a paper
    >>> return. Please someone correct me if I am wrong about any of

    >>
    >> I can't speak about Turbotax specifically, but the professional tax
    >> software I use allows for including statements like that in the
    >> electronic file.

    >
    >
    > I think the MLP lawyers have gone overboard in telling you to
    > attach this statement.


    Turns out that Turbotax (Deluxe) lets you create a "Blank Form" where
    the IRC Statement 751 can be added. After creating the "Blank Form" and
    doing an error check, it passes okay. I really won't know if I can
    actually e-file until I attempt it sometime in April.

    --
    << ------------------------------------------------------- >>
    << The foregoing was not intended or written to be used, >>
    << nor can it used, for the purpose of avoiding penalties >>
    << that may be imposed upon the taxpayer. >>
    << >>
    << The Charter and the Guidelines for submitting posts >>
    << to this newsgroup as well as our anti-spamming policy >>
    << are at www.asktax.org. >>
    << Copyright (2011) - All rights reserved. >>
    << ------------------------------------------------------- >>
     
    njoracle, Mar 13, 2011
    #8
  9. njoracle

    jwp2000

    Joined:
    Mar 23, 2011
    Messages:
    2
    I came across this discussion and have a question. Is the way this sale of an MLP being handled here (i.e. ordinary gain to line 10 of form 4797 and capital gain to Schedule D) for a sale of an MLP held less than one year? I have sold an MLP I have held for more than 1 year and my tax software is not putting aything in form 4797 and I am wondering if it is because I held it more than one year. If I read the tax instructions properly I need to put info in section III of form 4797 but that looks VERY complicated dealing with depreciation, recapture, etc. I know my oridinary gain from the sales schedule on my K1 should I just maually eneter it on line 10 even though I held the MLP for more than one year?....HELP!!!!
     
    jwp2000, Mar 23, 2011
    #9
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