Is there any tax software that can handle PTP Schedule K-1 from Energy Transfer LP?

Thank you! I was afraid TurboTax would be the answer. I've been avoiding it because of the cost, but at this point I just need to get this done. Do you know if I can import my info from FreeTaxUSA to TurboTax somehow, or will I need to start over from scratch?

Unfortunately, you'll need to start from scratch with TurboTax. There's no direct import functionality between FreeTaxUSA and TurboTax. If you've already entered most of your information in FreeTaxUSA, you could technically complete everything except the K-1 there, then do a separate filing with just the K-1 income on TurboTax. However, this gets complicated and could potentially create problems if you don't report everything consistently, so starting fresh on TurboTax is the safer option at this point.

Does it work with multiple K-1 forms? I have Energy Transfer plus two other MLPs and I'm drowning in paperwork. Does the system explain which numbers go where? That's my biggest problem.

How accurate is it though? Last year I messed up my PTP entries and got a letter from the IRS. Not going through that again. Also wondering if it helps with the basis calculations when you sell PTP units?

Yes, it works with multiple K-1 forms - I had three different ones myself. The system analyzes each form separately and tells you exactly which numbers go into which forms and boxes in your tax software. It breaks everything down by line item. The accuracy has been solid in my experience. It correctly identified all the passive activity limitations and told me which income was subject to self-employment tax versus regular income. And yes, it definitely helps with basis calculations for sales - it tracked my adjusted basis considering previous distributions that reduced basis, which was the most confusing part for me last year.

How does this actually work? I've been trying to call the IRS for literally weeks about my K-1 issues and can't get through. Are they just constantly redialing for you or something?

This sounds too good to be true. The IRS phone system is notoriously impossible to navigate. And even if you got through, would a random IRS phone rep really know the specifics of Energy Transfer LP K-1 reporting? I've found they usually just give generic advice.

They use a combination of technology that navigates the IRS phone tree and secures your place in line. It's not just redialing - they have a system that monitors hold queues and jumps in when there's an opening. When an agent picks up, you get a call connecting you directly. It's definitely not too good to be true - I was super skeptical too. And you'd be surprised about the IRS reps' knowledge. I specifically asked for someone in the business/partnership division, and the person I spoke with dealt with PTPs regularly. They explained exactly which forms I needed (Form 8582 for passive activity and where to report the Section 199A deduction). Much more specific than generic advice. They even emailed me the relevant IRS publications for Energy Transfer specifically.

But what about the basis calculations? That's the part that always trips me up with PTPs. When I got tiny distributions from Energy Transfer, some was return of capital that reduced my basis, and I never know how to track that properly.

The basis calculations are definitely the trickiest part. For PTPs like Energy Transfer, you need to keep track of your initial purchase price, then reduce it by return of capital distributions (usually shown in Box 19A of the K-1). You'll need to maintain your own spreadsheet tracking these adjustments year to year. When you sell, you'll use that adjusted basis to calculate your gain/loss. Technically, if your basis reaches zero before you sell, further return of capital distributions become taxable as capital gains in the year received.

Cash App Taxes (formerly Credit Karma) specifically excludes K-1s for publicly traded partnerships in their limitations. I tried it last year with my Enterprise Products Partners K-1 (similar to Energy Transfer) and had to switch software. They're upfront about not supporting it, at least.

Thanks for saving me the frustration! Seems like all the truly free options don't support these complicated forms. Guess I'll have to bite the bullet and pay for TurboTax or try one of the other suggestions here.

Thanks for the TaxSlayer recommendation! I hadn't heard of that option and the price point sounds much more reasonable than TurboTax. Quick question - when you say it "walked you through each section," does it actually provide guidance on which numbers from the K-1 go where, or do you still need to figure out the mapping yourself? I'm worried about making mistakes since this is my first time dealing with a PTP K-1.