I had a MLP which reported losses in box 1 part III in past years. I disposed of it this year.
In past threads I have seen:
As a passive investor, you cannot take those losses. Typically your MLP tracks this stuff, and it gets reflected in later K-1s. (ref 1)
but have also seen:
Tracking of suspended passive activity losses is each taxpayer's problem. (ref 2)
Question 1) These seem to disagree, how would I know which is true in my case?. So what do I with, where do I enter the total passive losses now since I have disposed of the MLP? Once I check the box that this is the final K-1 should the tax software then subtract out the accumulated and carried over passive losses? (in my case TT)
***********MLPs/PTCs typically make quarterly cash distributions. These distributions are not taxable. They are treated as a return of capital and reduce the investor's cost basis. (ref 3)
The MLP/PTP did send a K-1 that showed reinvestments and had 'sales schedule' that is kind of a worksheet and explains how to adjust cost basis and calculate capital gain.
Question 2) So after I do that, where do I put the results? I have long term and short term. Do I just enter those as a regular equity sell, completely separate from the K-1?
ref 1:
ref 2: