Handling EBIE from a Master Limited Partnership (MLP) in year of sale

Forum|Forum|2 years ago
October 15, 2023
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I have an MLP of which I sold all positions in 2022. The MLP statement shows excess business interest both in total as well as with state breakouts. There is no offsetting excess business income EBI. I don't know what to do with this for both Fed 1040 and State returns. It seems normally an 8890 would be filed and the amount carried forward but since the position was closed do I apply it this year against MLP income or basis? Is it applied to States as well in the amounts broken out on the K-1 supplement? I know this is late in the game but hoping someone will be kind enough to point me in the right direction.

Anonymous_

Employee

I'll page @nexchap and @Mike9241

4SSparkyAuthor

Thanks very much. My current understanding is that EBIE is added to the basis at the time of sale. I would like to confirm that that is correct and done prior to the 751 ordinary gain allocation. I am thinking to enter the total amount of EBIE as a positive basis adjustment on the 8949/Sch.D. The part that is throwing me is the state allocation. Not sure whether to back out Fed adj. and then enter state specific amount. Not alot of info I can find regarding EBIE as it applies to State returns. Got Fed return and states in limbo and the big day looming. Thanks for the consideration.