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How should tiered Publicly Traded Partnership K-1 data be entered into TurboTax? Should similar entries be summed or entered under separate K-1s with same partnership ID

Forum|Forum|6 years ago
June 7, 2019
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I have a Publicly Traded Partnership that owns three other PTPs and includes all the values for each item of the K-1 for every partnership. My question is should similar items for each PTP be summed and entered as one value or all values entered under a separate K-1 with the same partnership ID?

TurboTax Premier Windows

Best answer by nexchap

You'll want to create separate K-1s for each sub-entity. There's a couple reasons for this:

The IRS rules on PTPs state that losses from one PTP can't be used to offset income from another. So if you sum across all sub-entities, you can violate that rule. Even though a parent PTP owns the shares of the sub-PTPs on your behalf, you still can't violate that rule.
If the parent sells off one of the sub-entities in the future, you'd be entitled to recognize any prior year suspended losses for that sub-entity. That only works, though, if you've been keeping separate records.

You also mentioned entering each sub-entity with the "same partnership ID". If you're referring to the 9-digit number that's tied to the PTP, usually the parent PTP provides IDs for each sub-PTP.

N

nexchapAnswer

You'll want to create separate K-1s for each sub-entity. There's a couple reasons for this:

The IRS rules on PTPs state that losses from one PTP can't be used to offset income from another. So if you sum across all sub-entities, you can violate that rule. Even though a parent PTP owns the shares of the sub-PTPs on your behalf, you still can't violate that rule.
If the parent sells off one of the sub-entities in the future, you'd be entitled to recognize any prior year suspended losses for that sub-entity. That only works, though, if you've been keeping separate records.

You also mentioned entering each sub-entity with the "same partnership ID". If you're referring to the 9-digit number that's tied to the PTP, usually the parent PTP provides IDs for each sub-PTP.

**Say "Thanks" by clicking the thumb icon in a post**Note also, I'm not a Tax Preparer/CPA. Just a volunteer, seasoned, TurboTax user. Use any advice accordingly!