Breitburn Energy Partners LP fka BBEPQ

[TheGreatSwami]

Negative Depletion Deductions? One of my 3 K-1s was for a very small amount of common Units. I did NOT own the units through cancellation. There is a negative depletion deduction of over -$7,500. Is that to be treated as income?

My tax attorney is treating the negative deduction as income and in the end, the negative depletion deduction is making this K-1 $6,500 in positive taxable income. So I will be paying taxes on a small amount of common units that I did NOT hold through cancellation.

Is this correct? Is anyone else counting a negative depletion deduction as positive income?


Thanks