I called Nustar to ask whether 16D is foreign source other income including interest, or dividend, or capital gain distributions, or capital gains. Two persons from K-1 support line (1-800-310-6595) said that they don't know and told me to ask IRS or my CPA. They said that we don't need to report anything in box 16 if 16L is less than 350. However, the CPA from TaxAct said that she hasn't heard of it. Is it ridiculous that Nustar don't know what they put into the K-1 form and send to us? What's the right resource in Nustar for us to get the correct answer for K1? I sold all my Nustar stocks a few days ago to avoid any tax headache in the future.
Suggest you try reading the definitions page for you K-1. It is all spelled out there! You don't need to report line 16L at all. You do not need to report it because it gives you a credit for foreign taxes paid. If you don't want the credit, don't report it. If the CPA from TaxAct has not heard of the foreign tax credit - you got a really stupid CPA or maybe they are just a cleark saying they are a CPA!
Same issue with PAA, EEP and KMP. Any MLP with significant Canadian assets has income and taxes paid in Canada on behalf of the partnership. The simple answer is you do not need to report anything on Line 16. The difficulty is in getting credit for the foreign (Canada) taxes paid. You do need the line 16 entry to get that credit. If you are using TTax use forms to enter all the numbers. As to TaxAct i have no idea. Until 2 years ago they simply said their program would not handle a K-1. Guess not much has changed if the "CPA from TaxAct" could not instruct you on how to enter the numbers.
As to selling now to avoid the problem in the future - You will have the same issue next year plus a sale to report.
The people on the K-1 support line are not employees of Nustar. They are part of the accounting firm which hosts the tax reporting site. They can help you with questions on modifications to your K-1 and stuff like that, but they will never know the derivation of the numbers beyond what the K-1 package instructions say. Your holdings are input to a computer program which produces your K-1.