16 Apr 2013

MLP Sales in TurboTax

TurboTax doesn't handle nor document the process of handling MLP sales. This post summarizes the steps to handle MLP sales and still be able to EFile your return.
This post is primarily based on the information found on the TurboTax forum and I used it with TurboTax 2012.

You'll need the Schedule K-1 from your MLP holding and in particular an attachment to the K-1 called the Sales Schedule.

  1. Make a copy of this Google Spreadsheet and enter the information for your MLP sale from the K-1 Sales Schedule and the 1099-B.
  2. Enter the K-1 information using the TurboTax K-1 step-by-step process or by importing the K-1 txf file from the taxpackagesupport.com website. In TT 2012 this is found under the Wages & Income / Business Items / Schedules K-1, Q.
  3. In the step-by-step select the checkbox for This partnership ended in 2012 or the Disposed of a portion of my interest in partnership.
  4. Here's how to complete the sale information including the row number from the Google Spreadsheet:
    Sales Price - enter sales price value from the 1099B for this transaction (Row 3)
    Partnership Basis - cost from 1099B minus adjustment to basis from K-1 (Row 6)
    Ordinary Gain - enter ordinary gain amount from K-1 Sales Schedule (Row 8)
  5. Visit this sale in the Investment Sales Summary under Wages & Income / Investment Income / Stocks. (This field modifies the brokers imported 1099-B). Modify the Cost Basis and replace it with the Partnership Basis value (Row 6) in place of the value imported from the brokers 1099-B.
  6. This generated a duplicate and erroneous entry for this transaction on 8949. Switch to forms view (View > Forms), choose Open Form, search and select Form 8949. Open Form 8949. Depending on your situation, the duplicate entry will be on either Copy 1 or 2. I was able to override the entries associated with the duplicate transaction and TurboTax did not report an error once all fields were blanked out.
  7. Open the Schedule D AMT: Capital Ganis 7 Losses AMT form and you will also find a duplicate transaction. Override fields for the duplicate transactions as you did on the.

That's it.


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