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The Blackstone Group L.P. Message Board

  • caonline2k caonline2k Mar 28, 2008 12:11 PM Flag

    K1 mess

    Hi Gurus,

    I have around 600 shares of BX with avg. price of 33, I did not sell any of them last year, the only income I had was via dividend.

    Ho will K1 effec my taxes, I have already filed my taxes do i need to refile ??

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    • From what I understand, you can't record numbers from a draft K1 on a return because the K1 data hasn't been received yet by the IRS. The IRS might kick it back. From other posts I've read, most people recommend filing an extension (on advice from their accountants). I did a version of my taxes with the K1, and it does result in less of a tax liability than simply recording the distribution as dividend. However, I decided to record the quarterly distribution anyway under the section of Taxcut that asks for "dividends or distributions not reported on a 1099-DIV". Yes, this does result in an overpayment, and technically it is not correct, but at least I'm paying (actually overpaying) on taxes I owe now. When the "official" K1 comes in September, I'll file an amendment. I couldn't see filing an extension, or filing a return as if no K1 (draft or otherwise) or distribtuion existed. I rather pay what I owe now, and file an amendment to get any overpayment back.

    • Good God, people!!! Just call a CPA! It is not that hard!!!

      • 1 Reply to solsticemagic
      • For all you late filers like me:

        Called Blackstone phone number provided with tax package. After some checking, they said that the draft K1 will not be filed with the IRS. The final one will be filed around September or so.
        Called the IRS help number. They said there is no need to file an extension. The return can be filed with the draft K1 numbers, and an amendment filed, if necessary, when the K1 is finalized. I asked them if they cross-check the data on the return with the K1 they get from the partnership. They said they do (over time), but file the return anyway even though they haven't recevied the K1 from BX yet. It's not uncommon for K1s to be late, and you really need those K1 numbers to estimate the tax due.

    • I'm sure your K1 shows additional income of MAYBE 100 bucks, that isn't already reported on your 1040. File an amended return and pay the few dollars in tax. Its funny how all of you claim youre screwed by the K1 when you only hold a few hundred shares.

      • 1 Reply to yamab5800
      • I'm almost done with my taxes using taxact. I've entered all the box items into the k-1 schedule. However, i'm a bit stuck on the Distributions part as taxact gave difficult guidance on box 19.

        Box 19:
        A - $90

        Should this 90 be reported as "other income"?

        Here's what I have in box L:
        Capital contributed during the year - 9,090
        Current year increase - 132
        Withdrawals & distributions - (90)
        Ending Capital Account - 9,132

    • Yes,U should. Consulat yr CPA.

    • I did alot research about K-1 in an IRA (in my case a rollover IRA). Unless your distributions are over a $1000, you will not have to put it on your personal income tax form. The IRS will find out about it since the K-1 will be reported by blackstone. However, the K-1 should note that it is in a retirement account. When the IRS sees that, they will disregard the K-1.

      Thanks

    • I think its a big mess to lots of smal investors and perhaps creative accounting for some partners.

      Peole buy BX for speculautive purposes like any stock other stock. They buy, sell, sell short or play options all as part of speculative activities.

      When Blackstone cannot treat shortsellers or option players in BX as investors, how can it treat other variety of speculative players as partners.
      Just because a person buys or sell something available in the marketplace cannot make that person a partner and thus liable for taxes in partnership esp when he does not not actually receive a share of spoils.

      Individual stock holders who bought and sold, never signed anyhingthing that they are becoming partners. I believe Speculation is a legal activity in market place and there are two distinct categories - inevstors versus speculators.

      What about all the brokers and market makers, they also bought and sold BX, do they become partners also?

      I think it may turn out that ultimately individual stockholders of BX, may very well be treated as just pure sholders as and when partnership theory is chanllenged.

      Its may be another way of big partners who may be doing everything in a partnership settiing to load the burden of their taxes on invidual speculators who unloaded BX before distribution. So the big ones will get to keep all the undistributed distribution while the small ones pay the taxes. HA HA HA !!!! A theory to good to be true.

    • I think its a big mess to lots of smal investors and perhaps creative accounting for some partners.

      Peole buy BX for speculautive purposes like any stock other stock. They buy, sell, sell short or play options all as part of speculative activities.

      When Blackstone cannot treat shortsellers or option players in BX as investors, how can it treat other variety of speculative players as partners.
      Just because a person buys or sell something available in the marketplace cannot make that person a partner and thus liable for taxes in partnership esp when he does not not actually receive a share of spoils.

      Individual stock holders who bought and sold, never signed anyhingthing that they are becoming partners. I believe Speculation is a legal activity in market place and there are two distinct categories - inevstors versus speculators.

      What about all the brokers and market makers, they also bought and sold BX, do they become partners also?

      I think it may turn out that ultimately individual stockholders of BX, may very well be treated as just pure sholders as and when partnership theory is chanllenged.

      Its may be another way of big partners who may be doing everything in a partnership settiing to load the burden of their taxes on invidual speculators who unloaded BX before distribution. So the big ones will get to keep all the undistributed distribution while the small ones pay the taxes. HA HA HA !!!! A theory to good to be true.

    • Don't concern yourself with the distribution amount for tax purposes. The only amounts that should appear on your 1040 are the amounts on Lines 1 through 13. In fact my broker did not even list the Blackstone distribution/dividend on the annual 1099 they send for tax return purposes.

      Remember you are invested in a partnership, a partnership passes all income and expenses to the partners (you). So yes, you end up paying tax on slightly more income then the distribution amount.

    • For what it's worth, this is my interpretation:

      1. The K1 shows a small net gain after subtracting out the dividend (box L).
      2. I believe I'd have to pay income tax on the small net gain, AS WELL AS the dividend. Box L shows I actualy have capital appreciation from the net gain.

      If I'm right, the kicker is that even though the shares are trading below my cost basis, I still have to pay tax on the gain reported on the K1.

    • what if you traded BX in your IRA? Do I have to report anything?

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