Sorry but this is my first year with MLP's and I have a simple question. I am using H&R Blocks Home version and simply filing in the blocks from the K-1 boxes. Am I safe in assuming this will take care of putting everything where it belongs? Question is - is this considered PASSIVE? I have a loss in Box 1 and if I say PASSIVE, it disallows claiming the loss but NON-PASSIVE allows the loss and my IRS return amount is a lot better. Sorry to sound stupid but thanks for any answers.
It absolutely is passive and the tax software should know that. You cannot use that loss to offset other income. It can only be carried over to offset future losses from the SAME MLP (and gets unlocked when you sell your position). Others have said that your software does not do MLPs correctly. Turbotax is the best for MLPs.
The software only knows that if you answer the questions correctly. For eample in a plain old partnership, the losses are usually deductible. Probably the key is answering the "Is this a PTP (Publicly Traded Partnership)" question correctly among others.