Ridiculous wait time for form 1065 (K1)

Essentially it sucks to be you.

Form 1065 is NOT due until April 15 AND it can be extended until September

1. So the LP could elect to NOT file until 09/15/10 and you'd have to wait for the K-1. This is legal. As a side note, last year the 1065 could have been extended all the way out to October 15 - the EXACT SAME due date for an extended 1040. I have more than a few clients who've been caught in this situation over the years - sucked to be them too!

Who do you complain to? Whomever suggested or SOLD you this investment. The filing rules and possibilities SHOULD have been disclosed to you before you wrote your check.

A few other things you may not know about your investment in the LP -

1 - they can charge off some of the income to the investors (you) WITHOUT distributing any cash. This would cause you to pay tax on income credited to you without ever getting any money to pay the tax with;

2 - the General Partner has all the real control. For example (while most DON'T actually do this), the GP could take a guaranteed payment from the LP that would use up all the cash available, leaving nothing for the LPs. This is relatively legal too;

3 - Limited Partners don't get a vote in an LP so other than selling your investment all you can do is suck it up.

As a general rule, as both a tax accountant and a financial advisor, I steer my clients AWAY from LP investments.

Gene E. Utterback, EA, RFC, ABA

Gene E. Utterback, EA, RFC, ABA

The instructions for form 1065 say it has to be filed by the April/15 if the partnership's tax year is a calendar year (and there is a 2 month extension for LLC's operating in foreign countries). Schedule K and forms K-1 will also be filed at this time. March/10 sounds generous. I was not able to find a rule that says K-1's should be furnished by Feb/15, etc.

"lb" wrote

You could sell the investment if you're that unhappy with the returns.

Otherwise, as has been pointed out, they have till the 15th of April, and then it could be extended.

Blame the accountant that is preparing the tax return. Otherwise, there's no one to really complain to.

Thanks for all of the replys. I got myself into this situation, so I am to blame. It seems that the IRS should have some say as to how soon US investments should provide tax information to their shareholders so they can prepare their taxes. This company was paying a good dividend and then stopped and then merged with a partner and now the company has a much higher PE ratio. I am selling this as soon as I can see fit so as not to have to endure this situation again past next years tax filing.

If the LLC operates in a foreign country, is the final due date Dec/15 (by default due date is June/15, and with 6 month extension would be Dec/15).

It's OK in an IRA account (just like TIPS). I just got a K-1 for an ETF in my traditional IRA. Is there a way to tell which ETF's send K-1's? This information has to be available somewhere.

Some, with particularly small UBTI, such as DMLP, are problem-free. Others can be good to varying degrees. But avoidance is a simple route. I don't know of an easy way to gather that info when selecting investments. But on the other hand, there is some benefit for those who can successfully use PTPs (Publicly Traded Partnerships).

It does seem strange that many brokers don't alert people that these are not stocks. Think of the education and checking on experience that brokers do to qualify people to trade options. There should be a simple test required to trade PTPs IMHO.

lists many publicly traded MLPs(Master Limited Partnerships). When you click within the Tax WebSite column, you can often see forecast dates of availability unlessthe K-1s are already available. You can see that many becomeavailable in early March. Dates slip sometimes. I suggest that those with PTPs who feel a need to plan dates to either expect to finish taxes about April 10, or to ask for an automatic extension.

SNIPPED

I feel your pain, truly I do - but let's be clear and fair here. The IRS does have a say AND the company is complying with the law. There has been no breach of duty or contract, at least no in what you've posted.

No one has been harmed. The fact that you find it inconvenient that you can't file in Feburary doesn't mean that the investment company has done anything wrong.

As I said in a previous post, your gripe - which by the way I think is legitimate in substance - is with whomever sold or recommended this investment to you, NOT with the investment company.

If the company isn't preforming for you from an investment perspective than I agree that you should sell the investment.

However, I think it is just plain stupid to sell an investment that is doing well just because you can't file a tax return early. That's kind of like not wanting to cross the street to pick up a $100 laying on the sidewalk because it isn't fair that the money wasn't dropped on your side of the street.

The IRS also allowed brokerage houses to delay sending out 1099-DIVs and

1099-Bs until 02/15 for this year and last year. Does that mean that you would consider dumping all of your investments because they didn't go out on 01/31 like they did in prior years?

And considering that for the last 5 or 6 years or so MANY brokerages who sent info out on time, by 01/31, then issued corrected statements which caused untold thousands of taxpayers to AMEND their tax returns, is it really any better to file incorrectly early just to amend later? As a tax professional I'd rather wait and file correctly later.

Here's why - my client comes in, I prepare the return, it gets filed, my client gets a refund. Two months later they get a corrected statement (doesn't matter which one - W-2, 1099, K-1, you pick). As a result of this I have to prepare an amended return AND now the client owes MONEY because they got more refund than they should have (for clarity, lets say that they should have gotten $1,000 but actually got $1,500 - because the original statement was wrong) AND they have to pay me to prepare the amended return. The client cries "but it's not MY fault" and I agree with them. BUT it's not MY fault either. Should I not get paid for the extra work of amending the return when I did nothing wrong?

And what about you - would you really rather have to do your return twice (or in some cases I've seen THREE times) just to make sure you get a statement early?

Prudence, and the law, dictate that we make sure we file an accurate return. If that means we have to wait a few weeks or even several months to do so then there are options built into the system to accomodate this.

AND THIS is one of the best arguments there is for NOT getting a BIG refund, which is just an interest free loan to the authorities. You wait an entire year to get YOUR money back when you should try harder to ONLY pay in what you'll owe to start with. Then if it takes you until July to get a $50 refund or pay a $100 balance due WHO CARES? You have lost anything!

OK, I'll get off my soapbox now. Gene E. Utterback, EA, RFC, ABA