Amended Return Preferable ?

Sched K-1s issued by MLPs.

for year 2009 in respect of my interest in an MLP.  They told me they would not file the amended K-1 with the IRS unless I was going to file an amended return for 2009.  My first inclination is to not file an amended return because the tax effect of the corrected K-1 is no change in Federal tax and an increase of only $10 in California tax.

a passive loss) on line 1 than that which was originally reported. Consequently my ending capital account balance as shown on the corrected K-1 will change accordingly.

tracks a taxpayer's accumulated passive losses and capital accounts as reported on K-1s.  If so, I would file an amended return for 2009 so that the corrected K-1 does get filed so that, at the end of the day, when I eventually sell my interest in the MLP, there is not a discrepancy between what I report and the information that the IRS has accumulated from K-1s it has received over the years.

I have no knowledge about what the IRS does with K-1 information, but I seriously doubt that their system is sophisticated enough to track an individual's capital account balance from year to year.

In any event, I presume the K-1s you receive for 2010 and subsequent years will show the corrected capital account balances. I don't think you need to file an amended return for 2009. Just hang on to the corrected K-1 in case a question comes up in the future.

Katie in San Diego

Agree with Katie's answer. In case it turns out that the IRS does track capital accounts then if they ask you can reply with the amended K-1. That's why it's good to have the amended K-1 for your own records.

for year 2009 in respect of my interest in an MLP.  They told me they would not file the amended K-1 with the IRS unless I was going to file an amended return for 2009.  My first inclination is to not file an amended return because the tax effect of the corrected K-1 is no change in Federal tax and an increase of only $10 in California tax.

Because you owe CA tax an amended CA return should be filed. Maybe $10 is too little, and if it were me I wouldn't bother (even if I were going to receive $10 because the hassle of filing an amended return), but the official answer is that you should file an amended CA return and pay the tax + interest + penalty.

Sched K-1s issued by MLPs.

for year 2009 in respect of my interest in an MLP.  They told me they would not file the amended K-1 with the IRS unless I was going to file an amended return for 2009.  My first inclination is to not file an amended return because the tax effect of the corrected K-1 is no change in Federal tax and an increase of only $10 in California tax.

a passive loss) on line 1 than that which was originally reported. Consequently my ending capital account balance as shown on the corrected K-1 will change accordingly.

tracks a taxpayer's accumulated passive losses and capital accounts as reported on K-1s.  If so, I would file an amended return for 2009 so that the corrected K-1 does get filed so that, at the end of the day, when I eventually sell my interest in the MLP, there is not a discrepancy between what I report and the information that the IRS has accumulated from K-1s it has received over the years.

Other than the CA amendment, I agree that no amended return need be filed. When you prepare your 2010 return, adjust the PTP loss carryover to agree with the amended 2009 K-1. And for CA, make sure you really do have an increase in tax liability, by including any prior year PTP loss for CA in your computation. (You do need to maintain a spreadsheet of cumulative PTP losses by state).