How to handle K-1 form from Robinhood oil stock investments in tax filing?

The K-1 Form 1065 you received is from a Master Limited Partnership (MLP), which is common with oil and pipeline companies. Since your K-1 says Form 1065, you should select "Partnership/LLC" in TurboTax. MLPs trade like stocks but are actually partnership interests, which is why you're getting a K-1 instead of a normal 1099-DIV. The partnership passes through income, deductions, credits, etc. to you as a partner. This is different from regular stocks where you just report dividends and capital gains. Just be prepared - K-1s from MLPs can complicate your tax return significantly, even if you only invested a small amount. You'll need to enter various boxes from the K-1 into TurboTax, and some of this income might be subject to different tax treatments than regular investment income.

I went through the exact same headache with oil stocks on Robinhood last year! After hours of frustration, I finally found taxr.ai (https://taxr.ai) and it was a game-changer for dealing with these complicated K-1 forms. You just upload your K-1 and it breaks everything down in plain English, showing exactly what goes where in TurboTax. The site explained that my Form 1065 K-1 needed to be entered as Partnership income (which confirms what the previous commenter said), and it even walked me through which TurboTax screens to expect and what numbers to enter. Saved me from pulling my hair out trying to figure out all those boxes and codes.

Just wanted to update - I tried taxr.ai with my Robinhood K-1 and it actually worked really well! I was surprised since I was skeptical at first. It clearly showed me that my form 1065 K-1 needed to be entered as Partnership income in TurboTax, and explained all those weird boxes like "unrealized section 743(b) adjustment" that made no sense to me. The step-by-step guide for TurboTax was spot on and saved me a ton of time. I probably would've given up and paid an accountant $200+ if I hadn't found this. For anyone else dealing with K-1s from Robinhood oil stocks, definitely check it out.

If you're having trouble getting answers about your K-1 form, calling the IRS directly can actually help, but good luck getting through! I spent THREE DAYS trying to reach someone about my MLP K-1 questions last filing season. Then I discovered this service called Claimyr (https://claimyr.com) that got me connected to an actual IRS agent in under 15 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c The IRS agent walked me through exactly how to handle my K-1 from an oil partnership and confirmed that Form 1065 K-1s should be entered as Partnership/LLC in tax software. They also explained which state filing requirements I could potentially ignore based on my small investment amount. Saved me from making some costly mistakes!

I need to apologize and eat my words. After calling the IRS for 2 hours yesterday and getting nowhere with my K-1 questions, I decided to try Claimyr out of desperation. Within 20 minutes I was talking to an actual IRS rep who confirmed everything I needed to know about my Robinhood oil stock K-1. The agent verified that Form 1065 K-1s should be entered as Partnership/LLC in tax software and helped me understand the passive activity loss limitations that were confusing me. They even explained which codes on my K-1 could trigger audit flags if entered incorrectly. For anyone struggling with K-1 forms from MLPs, getting direct answers from the IRS was incredibly helpful. I was totally wrong about this service - it actually delivered exactly what it promised.

Another thing to keep in mind is that MLPs on Robinhood often have return of capital distributions that aren't taxable immediately but reduce your cost basis. This can create a tax surprise when you sell! I bought some pipeline MLPs in 2023, received K-1s, and when I sold in 2024, I had to pay tax on gains that were much larger than I expected because my cost basis had been reduced by those distributions. Just a heads up that your tax situation might be more complicated than just this year's K-1.

Honestly after dealing with MLPs and K-1s for two years, I sold all mine and went back to normal ETFs. The tax headache wasn't worth the slightly higher yields imo. Now I just get a simple 1099-DIV and my tax filing takes 30 minutes instead of days.

One more tip - if your K-1 values are pretty small (like under $1000 investment), you might be able to use the de minimis rule for certain parts of the form. This can simplify your reporting. Ask your tax software support about this or check with a tax pro. Saved me a ton of headaches with my small Robinhood MLP investments.

As someone who's been through the MLP K-1 maze multiple times, I'd strongly recommend keeping detailed records right from the start. Create a simple spreadsheet with columns for: Date of Purchase, Number of Shares, Original Cost Basis, and then add columns for each year's Return of Capital (Box 9a from K-1) to track your adjusted basis. Also, don't panic about the complexity - yes, MLPs are more work than regular stocks, but for small investments the actual tax impact is usually manageable. The key things to remember: 1) Form 1065 K-1 = Partnership/LLC in tax software, 2) Much of the "income" might actually reduce your taxes due to depreciation deductions, and 3) Keep those K-1s and basis records because you'll need them when you sell. One last thing - if this is your first year with MLPs and you're feeling overwhelmed, consider setting aside a small budget for a tax professional consultation just this once. They can walk you through the process and help you set up a good record-keeping system for future years. It's worth the peace of mind!