Mastering Reporting of Publicly Traded Partnership and MLP K-1s on Partners' Returns

For most K-1s received by taxpayers, reporting the pass-through items of income and loss is relatively straightforward. However, for many oil and gas PTPs and MLPs, the K-1 often requires the tax preparer to compile complex reconciliation schedules before transferring the information reported onto the partner's income tax return.

A Schedule K-1 from an oil and gas partnership can easily exceed 50 pages or more. These K-1s have important tax reporting information in the extensive footnotes following the standard page 1 boxes listing income, deductions, credits, and distributions. To allocate and report items on the client's tax return, tax professionals must use information from the footnotes.

Schedule K-1s from PTPs and MLPs also present challenges to tax preparers in reporting the client's basis and at-risk amounts in the investment. Tax professionals must review the K-1 and footnotes to prepare and maintain accurate basis schedules, at-risk amount calculations, and capital accounts.

Listen as our experienced panel provides detailed and practical guidance to help tax professionals correctly reconcile tax information from these complex K-1 schedules and accurately report the information onto the tax return.

1. The law and regulations, including recent developments
2. Review of Schedule K-1 data, including crucial footnote information
3. Required combinations and allocations
4. Gain/loss reporting for assets sold by the partnership
5. How to tie reconciliation schedules to Schedule K-1 to tax return
6. Basis schedule, capital accounts, and at-risk amounts
7. Oil and gas items

The panel will review these and other critical topics:

• The law and current regulations
• Understanding K-1 footnotes to determine items such as passive vs. non-passive income, as well as dispositions
• Knowing when a K-1 requires the tax preparer to enter info in return areas other than Sch. E pg. 2
• Reporting the information found in reconciliation schedules onto the partner's income tax return
• Calculating basis on capital assets sold within a partnership to correctly report gain or loss on Form 8949
• Preparing and maintaining a basis schedule for the partnership investment

Learning Objectives

After completing this course, you will be able to:

• Recognize the special rules related to PTPs
• Discern the unique tax treatment of PTPs
• Establish whether the passive activity loss applies
• Identify the unique provisions related to oil and gas partnerships
• Understand the reporting of capital assets sold
• Ascertain the tax advantages available for intangible drilling costs and depletion

• Field of Study: Taxes
• Level of Knowledge: Intermediate
• Advance Preparation: None
• Teaching Method: Seminar/Lecture
• Delivery Method: Group-Internet (via computer)
• Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of attendance verification prompts displayed throughout the program
• Prerequisite: Three years+ business or public firm experience at mid-level within the organization, preparing complex partnership and partners' tax forms and schedules; supervisory authority over other preparers/accountants. Knowledge and understanding of preparing Schedule K1s for publicly traded partnerships, reporting information from reconciliation schedules to a partner's income tax return, basis schedules, capital accounts and at-risk amounts; familiarity with the oil & gas industry, passive v. non-passive income and dispositions.

Strafford Publications, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of Accountancy have final authority on the acceptance of individual courses for CPE Credits. Complaints regarding registered sponsons may be submitted to NASBA through its website: www.nasbaregistry.org.

IRS Approved Provider

Strafford is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).