Reporting Master Limited Partnership K-1s on Partners' Returns

Navigating Footnotes and Tying Information to the 1040

Recording of a 110-minute CPE webinar with Q&A


Conducted on Thursday, January 24, 2019

Recorded event now available

or call 1-800-926-7926
Program Materials

This webinar will provide tax advisers and professionals with tools and practical knowledge to reconcile complex Schedule K-1s for master limited partnerships (MLPs), using sample K-1 information from partnership footnotes and disclosures as a roadmap. The panel will offer guidance on how to translate reportable information onto the partner's Form 1040, prepare basis schedules, and track passive loss limitations.

Description

For most K-1s received by taxpayers, reporting the pass-through items of income and loss is reasonably straightforward. However, for many MLPs, the K-1 often requires the tax preparer to compile complex reconciliation schedules before transferring the information reported onto the partner's income tax return. These K-1s have important tax reporting information in the extensive footnotes following the standard page 1 boxes listing income, deductions, credits and distributions. To allocate and report items on the client's tax return, tax professionals must use information from the footnotes.

Schedule K-1s from MLPs also present challenges to tax preparers in reporting the client's basis and passive activity losses in divesture transactions. Tax professionals must review the K-1 and footnotes to prepare and maintain accurate basis schedules, passive activity loss carryforwards, and capital accounts.

Listen as our experienced panel provides detailed and practical guidance to help tax professionals correctly reconcile tax information from these complex K-1 schedules and accurately report on the tax return.

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Outline

  1. The law and regulations, including recent developments
  2. Review of Schedule K-1 data, including footnote information
  3. Required combinations and allocations
  4. Gain/loss reporting for when an investor divests of their partnership unit
  5. How to tie reconciliation schedules to Schedule K-1 to tax return
  6. Basis schedule, capital accounts and passive activity losses
  7. Oil and gas items

Benefits

The panel will review these and other critical topics:

  • The law and current regulations
  • Understanding K-1 footnotes to determine items such as passive vs. non-passive income, as well as dispositions
  • Knowing when a K-1 requires the tax preparer to enter info in return areas other than Sch. E pg. 2
  • Reporting the information found in reconciliation schedules onto the partner's income tax return
  • Calculating basis on capital assets sold within a partnership to correctly report gain or loss on Form 8949
  • Preparing and maintaining a basis schedule for the partnership investment
  • Recent developments, including the proposed regulations regarding the definition of "qualifying income" for MLPs in the Natural Resource industry

Faculty

Baldwin, Robert
Robert Baldwin

National MLP Tax Practice Leader
PricewaterhouseCoopers

Mr. Baldwin assists MLPs with modeling and structuring the impacts of mergers, acquisitions, and dispositions, as well...  |  Read More

Buford, Tim
Tim Buford
Tax Partner
PricewaterhouseCoopers

Mr. Buford has more than 25 years of experience, including significant experience serving high-net worth families and...  |  Read More

Freeman, Ashley
Ashley Freeman
Tax Manager
PricewaterhouseCoopers

Ms. Freeman’s practice focus and client base includes high-net worth individuals, privately held companies, and...  |  Read More

May, Jeffrey
Jeffrey L. May, CPA
Tax Manager
PricewaterhouseCoopers

Mr. May is a Tax Manager in PwC’s National MLP Tax practice and is currently on tour in PwC's Washington...  |  Read More

Smith, Bill
Bill Baker Smith
Director
PricewaterhouseCoopers

Mr. Smith has been a member of the PwC MLP practice since 2006 and has expertise in the PwC suite of software...  |  Read More

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