Form 8949 Robinhood Securities

[Randall]

19 minutes ago, Abby Normal said:

I'll tell you what I find amusing over at reddit.com/r/tax/. All the Robinhood folks who bought investments that give them K1's. They had no idea what they were getting themselves into! And many of them have not had the pleasure of selling these investments yet.

Ha.  Those PTPs.  One client a few years ago had to report $29k in cancellation of debt income.  He was in a high tax bracket too.  A few days after I saw the K1, the company was in the WSJ.

[Abby Normal]

Yeah those things can explode in your face. I had one high roller with a bunch she finally sold. She had large cap loss carryovers and sold most of these at a loss, BUT the ordinary income portion that goes on 4797 was about 40k, so she had to pay tax on that. It was partly offset by deducting the suspended PTP losses on E2, but she still paid tax on the sales.

I had one of these once and it seemed like they were sending me my principal back since the K1's kept showing losses. Never again.

I tell my clients that the reason they're being invited into the partnership is because the business is so risky the banks won't lend them the money.

[Catherine]

34 minutes ago, Abby Normal said:

I tell my clients that the reason they're being invited into the partnership is because the business is so risky the banks won't lend them the money.

Good way to describe it!  I'm going to borrow that, Abby.

[joanmcq]

I had one this year that did something with related corporations and I had to file 2 926s.  TP doesn't make a lot of money.  I have no idea why she is investing in these things.

[Catherine]

12 hours ago, joanmcq said:

I had one this year that did something with related corporations and I had to file 2 926s.  TP doesn't make a lot of money.  I have no idea why she is investing in these things.

Because some well-commissioned "investment" advisor told her it was perfect for someone in her situation (whatever that situation is).

[joanmcq]

Yeah working abroad making approx. $30k per year.  Perfect for investing in partnerships.

[Hahn1040]

Just the other day, I had this discussion with a 19 year old college student who has at least 6 K-1s from PTPs!

i asked: "Why are you investing in PTPs!?!"  He had no idea what I meant.  He thinks he is making money...

I told him to warn his dad that the charge for his return would no longer be the "nominal add on" for a dependent's return. 

[Max W]

I there a lot of wash sales, the best way to go is with Tradelog, or Gainskeeper.   They will produce the 8949's.