Investor Relations

Schedule K-1

Schedule K-1

Schedule K-1 is an annual form used to provide each Terra Nitrogen Company L.P. (TNH) unitholder with their respective tax information for a given tax year (See Graphic Guide included in your package).

You may view your Schedule K-1 online and/or request changes to incorrect information through our K-1 reporting link by clicking here.

If you still have questions concerning your K-1, please call:

(877) 692-6562

Please note: Terra Nitrogen Company, L.P. strongly recommends that you consult with your personal tax advisor before undertaking any tax filing.

Schedule K-1 FAQs

What is a Schedule K-1? Why didn’t I receive a Form 1099?

Terra Nitrogen Company, L.P. (TNH) is a master limited partnership and is required under federal income tax laws to issue a Schedule K-1 to report each investor’s pro-rata share of the partnership’s taxable income. Investors will use Schedule K-1 to prepare their individual tax forms. A Schedule K-1 is sent rather than Form 1099, as partnerships are required to report information beyond what is available on Form 1099.

What is code “Z” in Box 20?

Please refer to the last section of the cover letter titled 2014 Schedule K-1 Supplemental Information. Under Code Z are reported Gross Receipts and Federal Bonus Depreciation including Box 1. For further information, refer to the 2014 Partner’s Instructions for Schedule K-1 (Form 1065).

I no longer own these units. Why am I getting a K-1?

A Schedule K-1 is sent to every investor who owned units in the partnership at any time during the tax year. Investors should contact their broker to confirm unit ownership before contacting us, as TNH relies on the ownership information as provided by the broker. If incorrect, please see below.

My K-1 is blank and I was instructed to contact you.

Your K-1 is blank because the transactions reported are not in balance. Please review the transactions listed on the Ownership Schedule provided in the K-1 packet to see why the account may not be balanced.

How is income reported on a Schedule K-1?

Each investor’s pro-rata share of taxable income is reported on Schedule K-1 and should be reported on the individual tax return. The income reported on the K-1 is generally passive income, taxable at the investor’s ordinary federal income tax rate. The cash distribution is considered to be return of capital for the investor, which may not be taxable and is not reported as dividend income. The cash distribution is generally not reported on your individual income tax return; however, if the cumulative cash distributions received from the partnership exceed your tax basis in the partnership, you would have taxable gain to report. For further information, refer to the 2014 Partner’s Instructions for Schedule K-1 (Form 1065).

Is the income reported on Schedule K-1 from a limited partnership considered Unrelated Business Taxable Income (“UBTI”)?

UBTI is a tax-exempt organization's (including IRA, Keogh and other qualified retirement plan's) distributive share of gross income and allowable deductions of a publicly traded partnership. As these are unrelated to the regular activities of the tax-exempt organization, they are includable in taxable income but may be offset by a $1,000 deduction. Please consult your tax advisor if you own units within a tax-exempt entity.

How is tax basis determined for computing gain or loss?

Your tax basis is the original amount paid for the partnership units, increased by the cumulative amounts of income and gain reported on Schedules K-1, reduced by the cumulative amounts of loss, deduction and credit reported on Schedules K-1. Tax basis is also reduced, but not below zero, by the cumulative amounts of cash distributions received from the partnership. Schedule K-1 Item L – Partner’s Capital Account Analysis provides an approximation of ending tax basis for all units owned at December 31. The sales schedule provided with the Schedule K-1 is a worksheet that can be used to assist the investor in calculating loss or gain on the sale of units.

Box 19 shows cash distributions that I didn’t receive. What should I do?

Please confirm the details of your unit ownership are correct on the ownership schedule. The ownership schedule is not proof of ownership, but provides the details of your ownership history with TNH as reported by the broker of record. If the detail is correct, please contact your broker for more information on your cash distributions. If the detail is incorrect, please see below.

What should be done with inherited units?

Units received through inheritance are subject to special valuation rules. Contact the broker with whom the original purchase was made for information on how to handle the transfer correctly.

What should I do if the information in my tax package is incorrect?

  • Before May 3, 2015: Corrections can be made by calling our K-1 Support Department at (877) 692-6562. Alternatively, corrections can be made directly on the Ownership Schedule. Sign the Ownership Schedule and return it to the K-1 Support Department by fax to (866) 554-3842 or by mail to the return address on the envelope.
  • After May 3, 2015: If you have changes to your ownership schedule after May 3, 2015, you should file IRS Form 8082 “Notice of Inconsistent Treatment or Administrative Adjustment Request (AAR)” to correct the information.

Are the items of income, deduction, gain or loss reported to unitholders on Schedule K-1 subject to adjustment by the Internal Revenue Service ("IRS") or any other taxing authority?

Yes, the tax reporting of TNCLP, like any other taxpayer, is subject to review by the IRS and the taxing authority in any other jurisdiction in which we report our activity. These taxing authorities can disagree with the manner in which we have reported our activities and can adjust the amount of income, deduction, gain or loss of TNCLP and therefore, may result in an increase of items of income, deduction, gain or loss allocable to an investor.