2025 Delek Logistics Partners (DKL) K-1 Guide: Your Broker's Basis Is Wrong

Delek Logistics Partners (DKL) is a publicly traded partnership (PTP) in the energy sector. As a PTP, it issues Schedule K-1s to unitholders instead of 1099-DIVs, which creates unique tax reporting requirements.

Like all MLPs, DKL distributions are not dividends — they're partnership distributions that reduce your cost basis over time. This makes accurate basis tracking essential.

Your broker tracks your original purchase price for DKL but never sees your K-1. Each year, distributions, income allocations, liability changes, and depreciation deductions adjust your cost basis — and your broker makes none of these adjustments.

After just a few years, the gap between your broker's basis and reality can be thousands of dollars. When you sell, that gap becomes a tax surprise — and the IRS already knows the right number because they receive a copy of every K-1.

Enter data from your DKL K-1 to calculate your adjusted basis for one year. Run this for each year you've held DKL to see cumulative erosion.

When you sell DKL units, a portion of your gain may be recharacterized as ordinary income under IRC §751 — taxed at up to 37%, not the capital gains rate. The more physical infrastructure the MLP owns, the larger your §751 exposure grows each year.

DKL also operates across multiple states, which may create nonresident filing obligations. Review your K-1 state schedule for allocations above each state's filing threshold.