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

You should select Partnership/LLC since your K-1 is from Form 1065. That form is specifically used for partnerships and LLCs that are taxed as partnerships. What happened is that some oil and gas investments are structured as Master Limited Partnerships (MLPs) that trade like stocks but are actually partnership interests. When you buy these through Robinhood, you become a partner in the business, which is why you received a K-1 instead of the typical 1099-DIV that comes with regular stocks. The K-1 will show your share of the partnership's income, deductions, and credits that you need to report on your personal return. These can get pretty complex compared to regular stock investments.

I went through this exact same headache last year with my oil stocks on Robinhood. I actually found this amazing tool called https://taxr.ai that literally saved me HOURS of frustration. You just upload your K-1 and it analyzes everything for you, tells you exactly how to enter it in TurboTax, and explains all those weird boxes and numbers. I was completely lost with all the different sections on the K-1 (like what the heck is "passive activity"??) and worried about making mistakes. The tool broke everything down in simple English and made sure I wasn't missing any deductions.

Just wanted to update - I tried that https://taxr.ai site after getting frustrated with my K-1 from Kinder Morgan. It actually worked incredibly well! It identified that I only needed to file in 2 states instead of the 5 I was worried about, and walked me through exactly how to report the weird depletion allowance and other oil-specific deductions. The breakdown of the passive activity limitations was super helpful since I had losses that I wasn't sure how to handle. Definitely worth checking out if you're dealing with these complicated K-1s from Robinhood energy stocks.

If you're dealing with K-1 issues, you should also know that calling the IRS for help with these can be a nightmare. I spent 3 weeks trying to get someone on the phone about how to report my MLP income correctly. I finally used https://claimyr.com to get through (there's a demo video here: https://youtu.be/_kiP6q8DX5c). They somehow get you past the IRS phone tree and have an actual agent call you back. I was skeptical but desperate after TurboTax kept giving me errors.

I need to eat my words from my earlier comment. After struggling with my MLP K-1 issues for another week, I broke down and tried Claimyr. Within 3 hours I was literally talking to an IRS tax specialist who explained exactly how to handle the Section 199A deduction on my K-1 that was causing my return to be rejected. The agent even helped me understand why I was getting different amounts on my Robinhood 1099 versus the K-1 (something about timing differences in how they report distributions). Definitely worth it when you're dealing with these complicated forms that most tax software struggles with.

Just a heads up about MLPs on Robinhood - they're not really worth the tax headache for most people. I had a small position in an oil MLP and the K-1 complexity added like 2 hours to my tax prep for a whopping $17 in distributions. Plus, you should know that MLP income can trigger UBTI (Unrelated Business Taxable Income) which is absolutely terrible if you hold these in retirement accounts. Stick to regular corporations for oil investments unless you really know what you're doing or have an accountant.

If its your first time with a K-1, make sure you look closely at box 20 code V. This shows if you have state filing requirements. Most oil MLPs operate in multiple states so you technically need to file in each one. When I first got an MLP K-1 I completely missed this and got letters from 3 different states the next year. Some partnerships have a composite return option where they file for you in some states (check box 20 code Z) but not all do this.