Don't forget about the actual allocation process once you've got your total purchase price (including assumed debt)! The IRS is super picky about how you allocate across the 7 asset classes. You have to go in order from Class I to Class VII and you can't just randomly assign values. This matters because different classes get different tax treatment.

I went through this exact same situation when I bought a restaurant last year. The confusion about where to put assumed debt on Form 8594 is super common because the IRS instructions are terrible about explaining it clearly. What helped me understand it was thinking of it like buying a house with a mortgage - you're still "paying" the full purchase price even though part of it is debt you're taking on. In your case, you gave the seller $133k cash AND took on $42k in debt obligations, so your total consideration is $175k. The key thing that tripped me up initially was realizing that Form 8594 doesn't have a separate line for "debt assumed" - it just cares about the total purchase price and how you allocate that across asset classes. So you put $175k as your total consideration, then figure out how much of that $175k should be allocated to equipment (Class V), inventory (Class IV), etc. Make sure you keep good documentation of the debt assumption in your purchase agreement since that supports the $175k total if the IRS ever asks questions later.

As someone who just went through their second year of EPD K-1 reporting, I wanted to add one more perspective that might help with your anxiety. The first year really is the learning curve, but I found it helpful to think of it as building a valuable skill rather than just a tax headache. Here's what I wish I'd known going in: **EPD actually provides excellent educational resources** beyond just the K-1 form itself. In addition to the sample K-1 that others mentioned, they host webinars in February specifically for individual investors explaining their tax reporting. I attended one last year and it was incredibly helpful - they walk through real examples and answer live questions. One practical tip: **set a calendar reminder for mid-February to check their investor website** for any updated tax guidance or webinar announcements. This gives you time to review materials before your K-1 arrives, so you're not scrambling to understand everything at once. Also, don't underestimate the value of what you're learning here. Understanding MLP taxation makes you a more sophisticated investor and opens up opportunities in the energy infrastructure space that many people avoid simply because they're intimidated by the tax complexity. You're building knowledge that will serve you well if you decide to diversify into other MLPs or energy investments down the road. The fact that you're asking these questions and preparing ahead of time tells me you're going to handle this just fine. EPD really is one of the best MLPs for learning the ropes!

I just wanted to chime in as someone who's been through the EPD K-1 process for three years now - all the advice in this thread is spot-on, and I can definitely relate to that first-year anxiety you're experiencing! One thing I haven't seen mentioned yet is that EPD typically sends out a preliminary tax estimate in January that can give you a rough idea of what to expect on your actual K-1. It's not the official form, but it includes estimated distribution breakdowns that can help you prepare and even start organizing your tax documents early. Also, if you're using TurboTax Premier, I'd recommend doing a practice run with last year's sample K-1 from EPD's website just to see how the software handles the data entry. It's kind of like a dry run that can boost your confidence before the real thing arrives. The psychological aspect really can't be overstated - I remember checking my mailbox obsessively in March of my first year! But once you get through it successfully, you'll realize it's just become another part of your annual routine. EPD has been incredibly consistent in my experience, and their investor relations team genuinely knows their stuff if you need help. You're asking all the right questions and preparing well. This community has given you excellent guidance, and you'll be helping the next batch of first-time MLP investors this time next year!

Don't forget that even if the IRS does classify your business as a hobby, it doesn't mean you can't deduct any expenses! You just have to deduct them differently. Hobby expenses are claimed as itemized deductions on Schedule A rather than business expenses on Schedule C, and you can only deduct up to the amount of income from the hobby. Since the TCJA in 2017, hobby expenses fall under miscellaneous itemized deductions subject to the 2% AGI floor, which means they're effectively eliminated for tax years 2018-2025. But there's talk this might change soon.

Based on your situation, you shouldn't be overly concerned about hobby classification. Having a profitable year followed by losses due to losing your main distribution channel actually tells a clear business story that the IRS would likely understand. A few key points that work in your favor: 1. **Substantial inventory ($135k)** - This is strong evidence of business intent. Hobbies don't typically involve six-figure inventory investments. 2. **Previous profitability** - Your $53k profit in 2022 demonstrates you can operate profitably, which is a major factor the IRS considers. 3. **External business disruption** - Losing your marketplace isn't a pattern of poor business management; it's an external factor that legitimate businesses sometimes face. To strengthen your position, document your efforts to rebuild: - Save all communications with potential new distributors - Keep records of marketing efforts and business development activities - Maintain separate business banking and proper bookkeeping - Consider keeping a business journal of your recovery efforts The IRS typically looks for patterns over multiple years, not isolated setbacks. Your situation shows business intent, professional operation, and legitimate profit motive. Focus on rebuilding your sales channels rather than worrying about classification issues that are unlikely to arise given your circumstances.

Has anyone used TurboTax's tax withholding calculator? I'm in almost the exact same situation (making about $55k from two jobs) and trying to figure out if I should adjust my withholding.

I'm in a super similar situation - just picked up a second job that'll bring me from $35k to around $51k total. One thing I learned the hard way is to make sure you understand the difference between how much tax you'll owe versus how much gets withheld from your paychecks. Your employers will each withhold taxes as if their job is your only income, which usually means you'll be underwithholding overall. I had to go back and adjust my W-4 at my main job to have an extra $150 per month taken out to avoid owing at tax time. Also don't forget about state taxes if you're in a state that has them! And if either job offers benefits like health insurance or retirement contributions, those can help reduce your taxable income too. Good luck with the new opportunity!

I'm in the exact same situation - mailed my paper return about 4 weeks ago and that "Return Not Processed" status has been haunting me! Reading through everyone's experiences here has been such a huge relief because I was starting to think the IRS lost my return or I made some critical error. The 8-12 week timeline that everyone keeps mentioning is honestly shocking - I had no idea paper returns would take this long just to show up in their system. I'm definitely going to set up that ID.me account this week to see if I can get more detailed information than just that vague "not processed" message that's been taunting me. I'm also really interested in trying the taxr.ai tool that several people have recommended for better timeline predictions. It sounds like it might give some actual insight into where our returns are in the processing queue instead of leaving us completely in the dark. If I still don't see any movement by the 8-week mark, I'll probably try that Claimyr callback service too. Thanks to everyone for sharing their timelines and experiences - knowing that we're all stuck in this same incredibly slow processing nightmare makes the wait so much more bearable! I've definitely learned my lesson about e-filing for next year. I thought mailing was "safer" but months of anxiety checking that portal obsessively really isn't worth it.

I'm dealing with this exact same issue! Mailed my return about 5 weeks ago and have been checking that IRS portal daily with no updates. This thread has been incredibly reassuring - I was genuinely starting to panic that my return got lost or I made some major filing error. The consistent 8-12 week timeline everyone is sharing is way longer than I ever expected for paper returns. I honestly thought we'd see some kind of acknowledgment within 2-3 weeks! I'm definitely going to set up that ID.me account this week to see if I can get more detailed status information. I'm also planning to try the taxr.ai tool that several people mentioned for better timeline predictions. It sounds like it could provide actual insights into where our returns are in the processing queue instead of just that frustrating "not processed" status that tells us absolutely nothing. Thanks to everyone for sharing their experiences and timelines - knowing that we're all stuck in this same incredibly slow processing situation makes the wait so much more manageable. I've absolutely learned my lesson about e-filing for next year! I chose paper thinking it was more secure, but the months of anxiety definitely aren't worth it.