TaxConnections Tax Professionals – Can You Help With This Question Of The Week?

TaxConnections Tax Professionals – Can You Help With This Question Of The Week?

When making a PARTIAL sale of an MLP, can designating recently purchased unit Lots as the ones to be sold reduce income tax?

I have searched and searched but have been unable to find this answer. I am unfamiliar with the accounting for MLP sales, and have a situation with a PARTIAL sale of an MLP, where it was designated the most recently purchased unit Lot be sold, which is documented by the broker’s statement. The K-1 figured the Ordinary Income based on the FIFO method using the first Lots purchased which are about 18 yrs. old.

The Lot specified to be sold is only about 6 yrs. old. Using the Lots on the K-1 would result in a very large taxable gain. With MLPs, does it really make a difference to designate the most recent Lots be sold (which was done) because it would seem they would have a much lower amount of distributions to be taxed than 18-yr-old units would? Apparently, the MLP will issue a K-1 based on the Lots that can be documented to have been sold (rather than their default FIFO method), and I am wondering if this makes sense to ask them to do this to decrease our taxes?

Please Comment Below

Login To TaxConnections To Answer Question

Become A TaxConnections Member Here

Kat Jennings founded, the first tax media site promoting and marketing tax professionals worldwide. With a world of tax innovation at our fingertips, TaxConnections brings the the first Virtual Tax Offices in history to market.
While many companies talk about the future of Virtual Offices, Kat Jennings was the first to bring virtual offices to the cloud for professionals enabling them to work from any location in the world with a laptop and/or cell phone. With future iterations, our technology will be available to multiple business verticals and professionals worldwide.

Join today at: or call 858.999.0053.

Twitter LinkedIn YouTube    

Leave a Reply

Your email address will not be published. Required fields are marked *

Meet Tax Experts At TaxConnections...