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NuStar Energy L.P. Message Board

  • radthc radthc Mar 1, 2013 2:45 AM Flag

    Seek help on tax basis on sale of NS

    I sold all my NS units in 2012 @51 (bought in 2009 @49). I downloaded all my brokerage info into the Turbo tax, which includes $2/share of LT capital gain. Consider that Turbo Tax ( mine was Home & Business version) had double entry issue last year (tax year 2011), requiring manual removal of the downloaded entry of capital gains/loss, I wonder if this issue has been fixed in this year's (tax year 2012) version.

    What is my capital basis, the blank I need to fill on Turbotax? Is it Purchase amount less prefilled adjustment to basis in the Sales schedule, Form K1 ? Or is it Purchase amount less withdrawals and distributions in the Partner's capital Analysis, Form K-1.

    Thank you very much.

    Sentiment: Hold

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    • There is no 'issue' for Turbotax to fix.
      The brokerage download is wrong for MLPs and should always be removed.
      If you donwload your brokerage statement first, then remove any entries for sales of MLPs.
      Then go through the MLP interview and select the box 'this partnership ended in 2012'.
      Then you get an extra screen to enter your basis adjustment and ordinary income amount.
      When you fill that screen, it populates the entry in schedule D (which will be different than the one from your brokerage since it will include basis adjustments), as well as form 4797 (from memory) for recapture of ordinary income for the distributions.
      The information comes from the sales schedule part of the K-1. At the bottom of the sales schedule page, look for the total of the columns for basis adjustment and ordinary gain. The basis adjustment amount is used to adjust your original purchase price and the ordinary gain is entered to TT and provides the recapture of tax on the distributions you received.

      Specifically to your question,, basis is your original cost with the basis adjustment from the sales schedule (and don't forget to enter the ordianry gain too), NOT from the partner captial account.

      • 1 Reply to lizahuang54321
      • Thank you very much for taking the time to reply.
        After a lot of effort , I managed to speak to someone knowledgeable at Turbo tax. His understanding of the basis issue concurs with yours.
        As far as the wrong amount of capital gains (Form 1098B) downloaded from Fidelity Brokerage, the EA at TT feels that that info has already be sent to IRS's computer, which matches the 1099s with taxpayer's 1040. He recommended adjusting the basis of the sold units so that the LT capital gains reads 0 and then leave the correct amount of LT capital gains posted into Form 8949. TT's sent me an e-mail providing an explanation to IRS, which I can attach to my return or send to IRS if it choose to question my return. Another CPA friend recommends adding code E at column f , then enter the LT CG reported on column g as adjustment, thus giving a net CG of 0.

        So, there appears to be 3 ways to work around the problem of being taxed twice because of entry error.

    • The 2 methods give different numbers, by about $15,000.

49.43-0.07(-0.14%)10:46 AMEDT