I have owned BPL since October of 2008. My 2012 K-1 shows a positive ordinary business income in Box 1 that is double my actual distributions. I own several other MLPs and have never seen Box 1 with positive income that is anywhere near the actual distributions let alone DOUBLE the amount. Does anyone else have this issue for 2012?
There is not necessarily any correlation between box 1 and distributions. Many E&P MLPs produce high box 1, and I have heard that PAA and MMP do also.
In BPL's case it may be due to some specific transaction they did this year and so be lower next year.
Or is may be that you are losing your tax shield due to depreciation running down - did your box 1 tend to rise each year or was this an unprecendented jump?
BPL has entered a bunch of terminals for their expansion. Terminals typically have large positive income and accordingly large UBTI if in an IRA. I agree that income positive income twice the distributions would be unusual. Did you call K-1 support to make sure your K-1 was correct? I have several K-1s where the units and transactions were not listed correctly which made all the numbers wrong. Double check everything. Also remember your broker sends the info in to the MLP. They in turn send it to K-1 support.