Energy Transfer Partners- how figure out basis

Technical topics regarding tax preparation.
#1
taxcpa  
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New client purchased units in 2012 and 2018. Does not have returns prior to 2015 and no basis calculations or carry forward non deductible losses are included in either of the last two returns.

Before I send them on a goose chase, is it possible to get older K1s from Energy Partners? Any other suggestions as to how to come up with the numbers?

First thought is to have them contact the prior preparer, but from the looks of the return, there may not be anything to get.

In round numbers, they paid $75K for the interest and received about $40K in "dividends". The K1 shows ending capital of $10K, which gives me a hint that there should be about $25K in disallowed losses. Maybe.
 

#2
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There is a website that deals with a lot of these PTPs. It’s been a few years since I had a client with them but you have to jump through hoops to get prior years. My client needed two old years so I can’t say if you’d get them going all the way back to 2012.

I suggest that this is post tax season work. My client wanted me on the phone when she called.
 

#3
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taxcpa wrote:New client purchased units in 2012 and 2018. Does not have returns prior to 2015 and no basis calculations or carry forward non deductible losses are included in either of the last two returns.

Before I send them on a goose chase, is it possible to get older K1s from Energy Partners? Any other suggestions as to how to come up with the numbers?

First thought is to have them contact the prior preparer, but from the looks of the return, there may not be anything to get.

In round numbers, they paid $75K for the interest and received about $40K in "dividends". The K1 shows ending capital of $10K, which gives me a hint that there should be about $25K in disallowed losses. Maybe.


So my client just sold his... they appeared on a 1099B from Wells Fargo. He's owned them a few years. The basis and proceeds were basically identical on the 1099B. On the K1, I simply put , in this case, 0 proceeds, 0 basis as the sale was on schedule D already.
 

#4
taxcpa  
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I have found the amounts reported on 1099B as basis to be incorrect in every case, as they reflect the original price paid. The PTP provides a schedule in the year of sale that facilitates correct reporting.

The brokerages I have seen do not track the activity after purchase, all of which can affect the tax basis. The capital account shown on the K1 can be close, but differ from tax basis in some cases. The brokerages also do not track the passive losses that may have to be deferred until there is passive income or sale. They simply don't have access to the information and how various items were treated by an individual.

Another wrinkle is that when tax basis reaches 0, further distributions in excess of income are long term capital gains.

Lots written on the complexities of these things. I agree, that figuring out basis and deferrals will have to wait for later. My client's capital account is still above 0, so its not likely that they have a gain this year.
 

#5
Joan TB  
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If there is a way to get more information, there may be a notation about a website on the ETP documentation that came with the K-1. Look thru that package and see if you can find something.
 


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