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Kinder Morgan Energy Partners Message Board

  • sugarfox98 sugarfox98 Aug 19, 2014 1:52 PM Flag

    Adjustments to Tax Basis Question

    KMP's Gain/Loss Calculator indicates an Adjustment to Tax Basis that is greater than my Purchase Amount. Started purchasing units in 2002 & have been reporting capital gains each year on tax return since my basis went negative. For calculation of my ordinary gain should I reduce KMP's Adjustment to Tax Basis to my total purchase amount? Thanks!

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    • 2 answers.

      First, the KMR Gain/Loss calculator doesn't know or care that you reported any distributions as capital gains because your basis went to zero. You have to make that adjustment yourself. So if you reported any capital gain income for distributions received, add that amount back to the adjusted tax basis shown on the calculator.

      But the calculator itself is just an estimate, so only use it (and any adjustments you make) to estimate the tax impact. The calculator, for example, is only current up through 2013, and there will be adjustments for 2014 as well. Furthermore, the calculators can be wrong. When I checked the calculator for ETE in 2013, it showed my ordinary income amount as greater than the sales proceeds, which is nonsense. When I actually sold some ETE in 2013, my K-1 showed a much more reasonable amount as ordinary gain. Like I said, only use the calculator for estimating the tax hit.

      Also, based on my experience with the ETE Gain/Loss Calculator, it didn't reflect the passive loss carryover, so I suspect you'd have to adjust for that as well. I own KMR, so I can't check the KMP Gain/Loss Calculator to see if it does anything with carryovers, but I doubt it.

    • With a MLP You would only have a Capital Gain if you sold your shares . Your KMP shares will be considered sold as the proposed merger moves forward. Your Disribution in excess of your Basis is taxed as common income and not Capital again or Dividends. You might talk this over with a tax advisor .

    • nancysueh • 1 hour 56 minutes ago
      1users liked this postsusers disliked this posts0Reply
      Call the KMP k1 help line they sent me the past 10 years of K1'2
      1 Reply to nancysueh
      nancysueh • 1 hour 56 minutes ago
      1users liked this postsusers disliked this posts0Reply
      1 Reply to nancysueh
      nancysueh • 1 hour 55 minutes ago
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      For tax information, please contact Tax Package Support at 800-232-1627
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    • This issue has been previously discussed in great depth. The Adjustment to Tax Basis figure is a red herring. The closest number you'll find enumerating your ordinary passive losses is Line 1 of each individual K-1. If you have saved all your K-1s, take them to a CPA. If you have used a CPA over the years, he/she should have them on record. If you look in your latest tax return, there should be a page enumerating your accumulated carry forward passive losses. A previous post describes how to get missing K-1s directly from Kinder Morgan. You would be well-advised to use a CPA.