2012 is the first year that I have begun investing in Linn Energy. I have received my K-1 electronically. I also understand that the dividend proceeds, for 2012, should be counted as a return on investment. I am having difficulty with my H&R Deluxe tax program, in getting the software to recognize the Line dividends as a 'return on capital'. Instead, the program wants to add the dividends as 'income' on Line 17 of the 1040.
Two questions, since the dividends on the K-1 are a 'return of capital' do I have to report them at all? If I do have to report the K-1 data, how do I do it in a method that indicates that it is a 'return of capital'. Thank you.
Saying it's a return of capital is simply a way of thinking about it.
In your tax return you need to enter every number on the main page of the K-1 (specifically boxes 1-20) in the appropriate place.
From your post, I did not get the impression you are doing that.
I do not know if H&R is capable of handling K-1s correctly.
I'm not familiar with the H&R tax program, but if it similar to TaxAct and TurboTax, it should have a Q&A where you add K-1 information line by line under the Business Income section. You'll enter the partnership name, address, Federal ID number, etc., then go through an extensive interview process where it asks what info is on which line, and the program will apply it to whatever forms the data should go to.
Barring that, you may need to contact the H&R help line.