reporting sale of publicly traded limited partnership (MLP/PTP)


P

Paul Hillman

First off let me be clear I have also posted this question in the TurboTax community (I got flamed for not stated such before)


In 2010 I purchased a gas master limited partnership, Inergy, in my Merrill Lynch account. I sold it in 2012.

each year they send a K-1, which I have input in TT under Business Investments Income.

I imported my activity for the year from Merrill Lynch into Turbo Tax, which reports the sale of this partnership with date, proceeds, cost basis, gain/loss under investment income, stocks, mutual funds, bonds.


Now filling out the K-1 info in TurboTax, if I mark I have disposed of the partnership, it starts asking bunch of questions the sale of the partnership, sales price, partnership basis, ordinary gain, 1250 gain.
 
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I

ira smilovitz

First off let me be clear I have also posted this question in the TurboTax community (I got flamed for not stated such before)





In 2010 I purchased a gas master limited partnership, Inergy, in my Merrill Lynch account. I sold it in 2012.



each year they send a K-1, which I have input in TT under Business Investments Income.



I imported my activity for the year from Merrill Lynch into Turbo Tax, which reports the sale of this partnership with date, proceeds, cost basis, gain/loss under investment income, stocks, mutual funds, bonds.





Now filling out the K-1 info in TurboTax, if I mark I have disposed of the partnership, it starts asking bunch of questions the sale of the partnership, sales price, partnership basis, ordinary gain, 1250 gain.








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You do need to enter this information as the information that you imported from Merrill Lynch is likely to be incorrect. ML doesn't have the adjustments that you would have been making in your basis each year due to the K-1 reported items, nor does it know what portion of your sale is allocated to the sale of assets which are not treated as capital investments.

In all likelihood, you should have a tax professional prepare your tax return this year as reporting the sale of MLPs is not a trivial exercise.

Ira Smilovitz
 

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