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Enterprise Products Partners L.P. Message Board

  • rudfox rudfox Mar 1, 2012 1:27 AM Flag

    How will the 2011 EPD K-1 extricate us?

    The 2010 EPD K-1 was really something. I refer you to this thread: "K-1 question (do we need to do 5 k-1 for this one?)".

    http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_E/threadview?m=tm&bn=6201&tid=12326&mid=12326&tof=204&frt=2

    I did enter 5 K-1s into TurboTax to represent the EPD K-1. The underlying reason for the complexity was that EPD was, I think, taking over existing partnerships. I wonder how this will play out this year. I would hope that we somehow enter 4 final K-1s to close out the extras. We will see. We were and are lucky that we have some very knowledgeable contributors.

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    • K-1 available on line this day.

    • I am trying to integrate what Liza and others have said with my understanding understand now. This is *a* way, and there may be a cleaner way. I use the forms mode, so maybe there is a better Step-By-Step way. My proposed method may be inadequate. So please critique it.

      1A. For each of DEP, EDE, ETP and RGNC virtual K-1s that TurboTax created for open the K-1. Go to page 3 (Section A). Write down the number from Row 1 column (b) along with the symbol or other description of the partnership. (DEP may be zero, so you could skip that one if so) Check that line 9 column (b) matches. If not, do not use this method, because something else is going on.

      1B. If you may have AMT, do the steps from 1A for page 4 (Section B).

      2A. Open the EPD K-1. Enter the *Combined* amounts for 2011! Note that the numbers you wrote down are carried from 2010, and do not duplicate the combined numbers. Go to page 3 (Section A). Write down the number from Row 1 column (b).

      2B. Right-click the number from Row 1 column (b), and choose Add Supporting Details. That should pop up a form. Fill in the form with the numbers from what you wrote down.

      Your form might have something like this:
      Suspended Loss from 2010 for EPD partnership -188
      Suspended Loss from 2010 for DEP held in EPD 0
      Suspended Loss from 2010 for EDE held in EPD -3
      Suspended Loss from 2010 for ETP held in EPD 0
      Suspended Loss from 2010 for RGNC held in EPD -1

      Note that the total gets computed, and in this example, the Total would be -192. Click "Close". Note that the column (b)box now reflects the total from the Supporting Details form. You could just omit the zero amount lines.

      2C. If you may have AMT, do steps 2A and 2B except for page 4 (Section B).

      3. Save-As a copy of your return with a new name. Your existing file name will represent an intermediate point in the process. Then delete the virtual K-1s for DEP, EDE, ETP and RGNC from the return. This is the return you will file.

      To be determined: Should you print the Supporting Details form(s) and mail in, or just keep the forms for your records? I am thinking to keep it for your records.

      • 1 Reply to rudfox
      • My eyes are glazing over so I didn't read this thoroughly, however regarding this...

        Your form might have something like this:
        Suspended Loss from 2010 for EPD partnership -188
        Suspended Loss from 2010 for DEP held in EPD 0
        Suspended Loss from 2010 for ETE held in EPD -3
        Suspended Loss from 2010 for ETP held in EPD 0
        Suspended Loss from 2010 for RGNC held in EPD -1

        If you are entering your combined numbers into the EPD K-1 and doing disposition then TT should have already carried over the EPD suspended losses for you automatically. So I think you would not have to enter the -188 for EPD. Only the others would you have to transfer manually like this.

        Suspended Loss from 2010 for DEP held in EPD 0
        Suspended Loss from 2010 for ETE held in EPD -3
        Suspended Loss from 2010 for ETP held in EPD 0
        Suspended Loss from 2010 for RGNC held in EPD -1

        And in this example it just results in an extra $4 passive losses being recaptured meaning a saving of $1 or $2 in tax. Which is why I said maybe investor might want to not bother with this step as the difference probably ends up being very small.

    • What I write below reflects my confusion as much as my current understanding.

      The whole point with the virtual K-1s is to cause you to not to use Passive Activity Loss (PAL) to cancel out gains in another partnership. EPD For each passive partnership you should be able to use the loss from one year to offset gain from a later year. When you sell a real partnership, you get a K-1 marked as "Final K-1". I would hope that at some point you fill in a virtual K-1 and mark that as "Final K-1". The effect of that should be to somehow get to "take" that loss. But maybe not. Maybe you never get to take that loss. That would not be logical to me, but taxes are not always logical to me.

      Now if you had bought EPD previous to 2011, created 5 (EPD DEP ETE ETP and RPG) K-1s for 2010 taxes, and then *sold* all of your EPD during 2012, then your K-1 would have been marked "Final K-1". If you created 4 (DEP ETE ETP and RPG) virtual K-1s, it would seem to me that they would also be marked "Final K-1". That would let you take any prior losses. In the case of DEP, that would not come into play, since the virtual K-1 for DEP had positive box 1 numbers for 2010 and 2011. Marking the DEP and other K-1s as final would at least let Turbotax to not expect those K-1s for 2012 taxes.

      If somebody had both bought and sold all of his EPD during 2011, I would tend to think that there would be no net change in creating 5 K-1s for EPD vs using the combined numbers in a single K-1. This presumes that any virtual K-1s would also be marked "Final K-1".

      So anyway, as a continuing holder of EPD, my questions are

      1. Do these virtual K-1s ever get unwound by making a virtual K-1 marked "Final K-1"? If so, when?

      2. Is EPD tracking the capital account effects for us through all of this, or do we need to handle that somehow?

      • 1 Reply to rudfox
      • In my case I only own EPD. As I look at the numbers on EPD's K-1, all of the items from the 4 or 5 other companies seem to be folded into the EPD numbers (e.g., lt. cap gains, etc). Why would I need to report anything other than what is shown on the EPD schedule. I did this last year and had no notice that I had done anything wrong. Think I will stay this simple minded approach until informed by the authorities that it is wrong.

    • Note theres also about 35 cents of taxable LTCG per unit.

    • The DEP portion of the EPD shows a positive box 1. There are still the five virtual K-1s as there were last year. I would hope this is not going to continue next year, but I have not yet seen a sign that it will not.

 
EPD
40.25+0.31(+0.78%)Aug 27 4:04 PMEDT

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