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Author: JWS1234 Old School Fool Global Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121150  
Subject: Reporting a line 1 Sched K-1 loss? Date: 3/31/2012 10:27 AM
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You have probably answered this a thousand times, so please point me to it if an old answer has not changed.

My K-1 indicates a loss on line 1. (I am still holding the stock, by the way; so this is not a final K-1.) How do I properly handle this on this year's tax forms? Partner's instructions say see your tax advisor. H&R Block software uses Schedule E (with zeros everywhere) and form 8582 to show a past-year loss. I'm inclined to go with this one; however, Form 8582 instructions say not to use that form for PTPs, which is what my K-1 is for - or, sometimes even worse in those instructions, to paraphrase Uncle Sam, "report it in the normal manner."

Thank you very much.
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Author: ptheland Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 115761 of 121150
Subject: Re: Reporting a line 1 Sched K-1 loss? Date: 3/31/2012 1:32 PM
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My K-1 indicates a loss on line 1. (I am still holding the stock, by the way; so this is not a final K-1.)

You've already lost me there.

You say you have a K-1. But K-1s can come from a partnership, an S corporation, an estate or a trust. So which of these do you have some ownership interest in?

Then you say you are still holding the stock. What stock? Perhaps this is an S corp? But later on you mention a PTP - which is a Publicly Traded Partnership.

I think we need more facts here.

--Peter

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Author: JWS1234 Old School Fool Global Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 115762 of 121150
Subject: Re: Reporting a line 1 Sched K-1 loss? Date: 3/31/2012 2:47 PM
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Sorry, Peter, but thanks. I was not clear. The stock is OKS.

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Author: ptheland Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 115763 of 121150
Subject: Re: Reporting a line 1 Sched K-1 loss? Date: 3/31/2012 3:20 PM
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The stock is OKS.

Soapbox time.

OKS is not a stock. It's right there in the company name: ONEOK Partners, LP. It's a limited partnership. Limited partnerships have unique tax reporting about them. Doing a bit more due diligence on investments before making them would seem to be in order.

End soapbox.

If you're using some tax software, find the place to enter K-1 information and make sure you indicate that this is a publicly traded partnership. The bottom line is that any loss from a PTP is deferred until you sell the PTP.

On the tax return, you'll report it on page 2 of schedule E. You'll give the name, ID number, write PTP next to the name, and put a zero in the amount. Next year, you'll need to know how much loss you didn't claim on your 2011 return, and net that into whatever the K-1 shows for 2012.

--Peter

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Author: JWS1234 Old School Fool Global Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 115764 of 121150
Subject: Re: Reporting a line 1 Sched K-1 loss? Date: 3/31/2012 3:48 PM
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Thanks, Peter. Your answer is exactly what I wanted to make sure of. Using Form 8582 seemed a zinger from nowhere for this case.

I guess I'll always give the impression I don't know what I am doing, especially when trying to be brief.

Doesn't the partnership keep track and include the yearly losses in the final K-1? I had read that somewhere, but it is a question for another year since I'd hate to double book-keep when the time comes.

Thanks, again.

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Author: irasmilo Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 115765 of 121150
Subject: Re: Reporting a line 1 Sched K-1 loss? Date: 3/31/2012 4:48 PM
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Thanks, Peter. Your answer is exactly what I wanted to make sure of. Using Form 8582 seemed a zinger from nowhere for this case.

I guess I'll always give the impression I don't know what I am doing, especially when trying to be brief.

Doesn't the partnership keep track and include the yearly losses in the final K-1? I had read that somewhere, but it is a question for another year since I'd hate to double book-keep when the time comes.


No, the partnership does not keep track of your losses. It will (generally) keep track of your tax basis which includes not only your operating losses, but adjustments for other separately reported items of income/expense and cash distributions. If you fail to keep track of the suspended losses, it's your "loss" (pun intended).

Ira

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Author: JWS1234 Old School Fool Global Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 115766 of 121150
Subject: Re: Reporting a line 1 Sched K-1 loss? Date: 3/31/2012 4:59 PM
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Thanks, Ira. Good info! (I think I expected as much, though.)

You guys have been a great help. I may even finish my taxes this year - and sleep better thinking they are done right!

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