Selling MLP and Common Stock

Forum|Forum|2 years ago
May 25, 2023
1 reply
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In a personal account in 2022, I sold an MLP producing a gain of $12,000. In a different personal account, I also sold common stocks producing a loss of $14,000. Since both accounts were in my name only, it appears to me that I can combine these transactions and reduce the gain on the MLP sale and end up with a $(2,000) loss to be deducted from income?

Do I have this correct?

Thanks for any advice,

Bob e

Not A Product Question

Mike9241

maybe. when many MLPs are sold part of the gain is section 751 gain which is ordinary income. this adds to tax basis thus reducing the capital gain portion

For example. say sales price was $40,000 tax basis on date of sale was $28,000 (this will be different then what you paid to originally, your original tax basis, becuase the partnership activity affects that original tax basis) thus your total gain is $12,000. however, if the supplemental sales schedule that accompanied the final k-1 reports $4,000 of section 751 gain then only the remaining $8,000 of gain is capital gain so now you have a net capital loss of $6,000 for 2022 of which only $3,000 (if not filing s (MFS) would be deductible. the remaining $3,000 would be a capital loss carryover to 2023. so in this example you would have $1,000 of net income from these transations in 2022 ($4000 ordinary less $3000 capital loss) and $3000 of loss in 2023