Sale of MLP Prevents Electronic Filing?

Question

I sold some units of a MLP and received a sales schedule from the partnership. The sales schedule lets me calculate how much is posted to Form 4797 Part II, line 10 and Form 1040 Schedule D for this transaction.

Because of this sale, I understand I am required to attach an IRC Section 751 statement to my filing which states (in part) "The Taxpayer has reported ordinary income upon the disposition of units of ...."

Assuming the above is correct, I see no way of being able to file electronically with Turbotax because of the need to attach the above statement to the filing. Therefore, I will have to submit a paper return. Please someone correct me if I am wrong about any of the above.

Tom Healy CPA · Accepted Answer

I can't speak about Turbotax specifically, but the professional taxsoftware I use allows for including statements like that in theelectronic file.

D. Stussy · Answer

transaction.Which software is that?  I need the ability to attach "white paper"attachments to convert some clients to e-file (who historically have beenexcluded from such).

Arthur Kamlet · Answer

I think the MLP lawyers have gone overboard in telling you toattach this statement.

Tom Healy CPA · Answer

messagenews:       Probably most do. A few years ago I used UltraTax; it had entries onthe E Filing screen for "Preparer Notes" and "Regulatory Explanation."Essentially these are free-form notes that are part of the electronicfile. I'm now using CCH Small Firm Services for business returns; theindividual e-file forms include sections for preparer notes, electionstatements, and regulatory explanations; and there is an Elections/Statements form for business returns that is also included in theelectronic file. Finally, for individual returns I'm using ProSystemFx; as with the others, there's a form in the Electronic Filingsection for free-form explanations, elections, and preparer notes.

njoracle · Answer

I agree. I will probably just e-file and wait for the IRS to ask me mail in the statement if they really want it.

D. Stussy · Answer

messagenews:       m...OK, thanks.  So, several different packages now support this.  I've bitchedto the IRS every year for the past decade about not accepting "white paperattachments" and it was nice of them NOT to tell me that it's nowsupported.  :-(

njoracle · Answer

Turns out that Turbotax (Deluxe) lets you create a "Blank Form" where the IRC Statement 751 can be added. After creating the "Blank Form" and doing an error check, it passes okay. I really won't know if I can actually e-file until I attempt it sometime in April.

Sale of MLP Prevents Electronic Filing?

Join the Discussion

Didn't find your answer?