2019 Schedule K-1s
Enviva Partners, LP (NYSE: EVA) 2019 Schedule K-1 Tax Packages are now available online for public unitholders. Please click the link below to access your tax package on Enviva’s Tax Package Support website:
Go to our website and sign up to receive your 2020 K-1 Tax Package electronically.
New for tax year 2019
Tax Cuts and Jobs Act of 2017 modified IRC Section 163(j) “Business Interest Expense Limitation” – For tax years beginning after 2017, new reportable items could be required. Schedule K-1, Lines 13K, 20N, 20AE, and 20AF may possibly include amounts needed to report your Business Interest Expense Deduction. Please consult your tax advisor.
Section 199A PTP Income
Line 20, Item Z – Section 199A PTP Income: The partnership does not have any W-2 wages. For individuals, trusts, and estates holding units in a PTP, the amount reported on this line is crucial to claiming the new deduction and lowering your rate of tax on PTP income. Please consult your tax advisor.
Unit Sales: If you sold or otherwise disposed of your partnership units in a taxable transaction in 2019, the portion of your gain or loss that is treated as ordinary income may be considered qualified Section 199A PTP income. This amount is not included in the amount reported on the Schedule K-1, Line 20Z. Please consult your tax advisor.
Frequently Asked Questions
Do I report any cash I received as my taxable income?
No. You should report the income items shown on your Schedule K-1 provided to you by the Partnership.
Why is the amount of cash I received different than the amount I must report on my individual income tax return?
The cash distributions you receive represent your share of our available cash. The amount you are required to include in your individual income tax return is your share of our income and related items, allocated based on the number of units you owned during 2019 and reported on your Schedule K-1. The difference between available cash and income is mainly caused by depreciation (a non-cash expense).
What is a Schedule K-1?
Enviva Partners, LP is a publicly traded limited partnership consisting of a general partner and many limited partners (including the investing public). Therefore, all income and expenses flow through to the unitholders to be reported on their individual tax returns. The Partnership is required to file a Form 1065 with the IRS which includes a Schedule K-1 for each unitholder reporting their respective tax information.
Why do I receive a Schedule K-1 rather than a Form 1099?
Form 1099 is used to report interest and dividend income. Partnerships are required to separately report many different items of income, gain, loss, deduction and credit. Federal tax law requires these items to be reported on a Schedule K-1.
Why don’t I receive my Schedule K-1 by January 31, which is the date required for distribution of Form 1099?
The required distribution date for Schedule K-1s is different than for Form 1099s. Federal law requires partnerships to provide a Schedule K-1 to partners no later than the extended due date of the partnership return. However, Enviva Partners, LP strives to provide Schedule K-1s as early as possible. Prior to mailing the Schedule K-1s to unitholders, Enviva Partners, LP obtains information regarding units bought or sold during the year from brokerage firms and our transfer agent to prepare the Schedule K-1s. Much of this information, in accordance with applicable law, is not provided to us until late January. Following a review and transfer of this information, the final books of the partnership must also be closed and other information must be cleared, reviewed, and processed before Schedule K-1s can be printed and mailed.
What should I do if the information in my tax package is incorrect?
Make any corrections directly onto the Ownership Schedule and return it to the Partnership by May 15, 2020 at the address given in the instructions. You may also call 1-855-839-4124. The partnership will use the information on the Ownership Schedule to update its records and will send you corrected tax information.
What information should I use to file state tax returns?
The State Schedule displays your share of state tax items for states in which the Partnership has operations. You may be required to file a tax return with the states even though you are not a resident of these states. State Forms will be available at a later date on our website www.envivapartners.com.
NOTE: DUE TO VARYING AND FREQUENTLY CHANGING TAX LAWS BY STATES, YOU SHOULD CONSULT WITH YOUR PERSONAL TAX ADVISOR CONCERNING YOUR FILING REQUIREMENTS AND THE PROPER TAX TREATMENT OF PARTNERSHIP ITEMS ON YOUR STATE INCOME TAX RETURNS.
Do I have to file tax returns in any state in which I do not live?
Certain states require unitholders to file tax returns in the states in which the Partnership operates. You should consult with your tax advisor regarding the need to file state tax returns.
Am I required to file tax returns for the states in which EVA operates?
Certain states require unitholders to file tax returns in the states in which we operate. You should consult your tax advisor for additional guidance on this issue. In addition, state tax forms and instructions can be obtained via the internet at sites such as www.taxsites.com or by contacting the appropriate state’s department of revenue.
What is Unrelated Business Taxable Income (UBTI)?
UBTI is relevant for a tax-exempt organization (including IRAs, Keogh and other qualified retirement plans). It represents the distributive share of gross income and allowable deductions of a publicly traded partnership which is considered to be unrelated to the regular activities of the tax-exempt organization and therefore includable in taxable income. UBTI may be offset by a $1,000 annual deduction. We expect virtually all of our income to be considered UBTI for these tax-exempt organizations.
What federal tax return is used to report UBTI?
Tax-exempt organizations (including IRAs, Keogh and other qualified retirement plans) are required to file Form 990-T if they have gross income from an unrelated trade or business of $1,000 or more. Gross income is gross revenue minus the cost of goods sold. See 2019 SCHEDULE K-1 SUPPLEMENTAL INFORMATION for your share of EVA’s gross income.
How is my tax basis affected by cash distributions, income and non-recourse debt?
The cash distributions you receive decrease the tax basis in your EVA units. At year end, your tax basis is also adjusted up or down by your share of our taxable income or (loss) and increased by non-recourse debt allocated to you on your Schedule K-1.
Does the Schedule K-1 show my tax basis in the units I own?
No. However, the Ending Capital Account under Item L in the Schedule K-1. The Ending Capital Account includes your original cost of units, as reported to us by your broker, and other adjustments affecting tax basis. However, brokers do not always report original cost to us, or the original cost reported may be incorrect. When brokers do not report original cost to us, the lowest closing price for the month in which you purchased units is assumed to be the cost. This assumption, or incorrect reporting by the broker, can cause the Ending Capital Account to be different than your actual tax basis at December 31.
If I sell my EVA units, why is there ordinary income to report?
A sale of units is treated as if there were a sale of the partner’s allocable share of each of our assets. Gain on the sale of assets for which depreciation deductions have been taken is treated as ordinary income rather than capital gain. The ordinary income on sale of units represents the gain resulting from depreciation deductions previously allocated to you.
If I sell my units, how is my tax basis determined for computing gain or loss?
Your tax basis is the original amount paid for the partnership units. The basis is increased by the cumulative income and gains and is reduced by cash distributions, as well as cumulative amounts of loss, deduction and credits reported on Schedule K-1.
Is the taxable income I earn from my investment in EVA subject to the 3.8% Net Investment Income Tax?
If you are an individual who is a citizen or resident of the United States and you do not materially participate in the activities of EVA, the items of income, gain, loss, and deduction reported on your Schedule K-1 as well as any gain or loss you recognize from the sale of EVA units may be subject to the Net Investment Income Tax. Certain trusts and estates may also be subject to the tax. The tax applies when a taxpayer’s modified adjusted gross income exceeds certain threshold amounts.
Where is my 743(b) basis adjustments reported?
Amounts for Section 743(b) positive and negative basis adjustment have been included in the net amount reported on Line 1 and Line 10 and are not reported separately on Line 11F or Line 13V.
Where can I find my ordinary gain recapture related to the sale of my units?
Line 20AB: Section 751 gain (loss) This is the amount of Section 751, ordinary gain recapture also reported on the 2019 Sales Schedule in Column 7.
Is all the information I need to calculate my current year 199A deduction included on line 20Z?
Possibly Not. If you sold units in 2019 you can increase your 199A income by the amount of ordinary recapture recognized as a result of the sale. Please refer to your sales schedule column 7 (if you sold units in 209) for this amount. There could be negative prior year 199A amounts that need to be considered. See FAQ immediately below.
What do I do with negative Section 199A amounts reported on 20Z?
Negative amounts are carried forward and reduce future positive Section 199A amounts allocated to you until the negative amount is used up. Prior year negative 199A amounts reported to you can be obtained from Tax Payer Support.
IRC Section 751 Statement
If you disposed of some or all of your units during 2019 and have Ordinary Gain in Column 7 of your Sales Schedule, a Section 751 statement must be attached to your tax return. Example language for the statement is shown below:
“The taxpayer has reported ordinary income upon disposition of units in Enviva Partners, LP, as provided by the General Partner. The amount was determined in accordance with Internal Revenue Code Section 751 and the detailed information is available in the offices of the General Partner upon request.”