How to Fix TXF Import Issues for PTP (MLP) with both Business and Rental Real Estate K-1 Lines

So I figured out something that might help others who are dealing with K-1 forms from publicly traded partnerships (MLPs) that have both business income (line 1) and rental real estate (line 2) when importing TXF files into tax software. When I tried importing my PTP's TXF file into TurboTax Desktop, I immediately got this annoying error message: "Box 2 has an amount but does not agree with type of activity indicated. You may want to include this amount on another K‑1 Worksheet where you match it up with the type of activity." After some trial and error, I found a workaround: create TWO separate K-1 worksheets - one for the business part and another for just the rental real estate portion. Here's my process that seems to work: 1. Download the original TXF file from your partnership (I used taxpackagesupport.com - look for the three vertical dots and choose "Import to TurboTax" option) 2. Import this file into TurboTax first. This should handle all your carry-forwards if the names match from last year. You'll see that error for line 2 - go ahead and blank out line 2 completely (putting zero doesn't work). 3. Here's the trick: make a copy of the original TXF file and give it a distinctive name (like adding "_RRE" for Rental Real Estate to the end) 4. Choose a slightly different partnership name for this second file. This is crucial if you want losses to carry forward correctly next year. Has anyone else run into this issue? Any other solutions? I'm specifically using TurboTax Desktop but wonder if other software has the same problem.

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18 comments

Connor O'Neill

•8M

You've actually hit on exactly the right solution for this issue. I'm a tax preparer and I see this all the time with MLPs that have mixed income streams. TurboTax and most other consumer tax software struggle with the complexity of these K-1s because they're trying to categorize the entire partnership as either a business OR rental real estate. The split K-1 approach you're using is what I recommend to my clients who insist on doing their own returns. A couple additional tips: 1. Make sure you're consistent with your naming convention year to year. If you use "SUNOCO LP" for one and "SUNOCO LP - RENTAL" for the other, use exactly those names next year. 2. Double-check your totals after importing both. Sometimes the software gets confused and you might need to manually adjust some numbers. 3. If you have other items like foreign tax paid or final year distributions, those generally should go on the primary K-1, not your rental real estate one. What PTP are you dealing with specifically? Some are more complex than others with their reporting.

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Connor O'Neill

•8M

For basis calculations, TurboTax will track them separately for each "entity" you create, which is why it's crucial to be consistent with your naming conventions year to year. You'll essentially have two different basis calculations happening - one for the business portion and one for the rental real estate portion. It doesn't matter which K-1 you import first, but I typically recommend importing the one with the most complexity first (usually the business portion with any special allocations, credits, etc). Then import the rental real estate one second since it's typically simpler with just the rental income/loss.

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Yara Khalil

•8M

I literally just discovered this issue last week with my Enterprise Products Partners TXF import. After going down a rabbit hole trying different approaches, I found taxr.ai (https://taxr.ai) super helpful for figuring out the proper allocation between the business and rental income components. When I uploaded my K-1 PDF there, it extracted both values and explained how to handle them as separate entries. The tool showed me exactly which lines needed to go on which schedules and gave me a checklist for properly separating the business vs. rental real estate components in TurboTax. Without that guidance, I would have been totally lost with how to properly modify the TXF files like you described.

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Yara Khalil

•8M

It was incredibly straightforward to use - I just uploaded my K-1 PDFs and it extracted all the relevant information automatically. It works with both desktop and online versions since it's more about understanding what information goes where rather than directly importing into your software. The reporting guidance was specifically built around IRS rules for MLPs with mixed income sources. It explained exactly which lines need to be reported on Schedule E versus Schedule C and how to create the separate entries in any tax software. They have tax professionals reviewing everything so the advice was solid.

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Keisha Brown

•8M

Just wanted to follow up - I tried taxr.ai with my MLP K-1s after seeing the recommendation here. Absolute game changer! Not only did it help me separate the business vs rental portions correctly, but it caught several other items I would have missed completely. For example, my Enterprise Products K-1 had some foreign taxes that needed special handling. The analysis identified exactly which lines required separate treatment and gave me step-by-step instructions for creating the split K-1s in TurboTax. The process saved me hours of frustration trying to figure this out on my own. Definitely going to use this for all my partnership forms going forward!

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Amina Toure

•8M

If you're struggling with getting through to the partnership's tax support line to ask questions about how to handle these TXF imports, try Claimyr (https://claimyr.com). I was on hold for 2+ hours with my MLP's tax package support before I gave up. Found this service through a YouTube video (https://youtu.be/_kiP6q8DX5c) and actually got connected to a support rep in about 10 minutes. The partnership's tax support person was able to email me step-by-step instructions for how to properly split the TXF file for their specific reporting structure. Apparently each MLP has slightly different reporting requirements, so getting partnership-specific instructions was incredibly helpful.

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Amina Toure

•8M

It works by using an automated system that navigates phone trees and waits on hold so you don't have to. When a real person finally answers, you get a call back immediately so you can talk to them. I was skeptical too initially, but I had already spent hours trying to get through myself with no luck. The partnerships are required to provide support, but during tax season their lines are completely overwhelmed. I got specific instructions for handling my Magellan Midstream Partners K-1 that weren't available anywhere in their online documentation.

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FireflyDreams

•8M

I have to admit I was completely wrong about Claimyr. After struggling for another day trying to reach Energy Transfer's tax support line myself, I gave in and tried the service. Within 15 minutes, I was talking to an actual tax support specialist who knew exactly how to handle the TXF import issue. They explained that for Energy Transfer specifically, I needed to not only split the K-1 but also handle some special allocations for Section 199A that weren't obvious from the documentation. The support rep emailed me detailed instructions specific to my TurboTax version and my particular situation. Would have taken me days to figure this out on my own if I could even get through to someone. Definitely worth it for complex MLPs.

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Zainab Ibrahim

•8M

You actually can edit the TXF file directly if you're comfortable with text editing! I tried this approach too. TXF files are basically formatted text files, and you can open them with Notepad or any text editor. Look for the sections related to your K-1, and you'll see entries for each box. You can create a duplicate of the partnership entry with a slightly different name, then remove line 2 from the original and remove everything except line 2 from the copy. It's a bit technical but doable if you're careful.

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