I have 2 Questions. First, If one sells shares of an MLP which I have owned for over 7 years
and its cost basis is now below zero, I assume I must pay the LT capital gains tax rate
on the difference between the original purchase price and the sales
price and also pay my normal tax rate of 25% on the difference between the purchase price and the adjusted cost basis. Is this correct? If so, on what form
or forms do I show the difference between the purchase price and the adjusted cost basis.
Secondly, if one continues to hold the shares with an adjusted cost basis below zero, how are the cash distributions
taxed? Where do I report this?
For ur info, I am familiar with K-1 reporting
but have not encountered this situation
where my cost basis is noe below zero.