Box 19A shows your MLP cash distributions. Here's exactly how they affect your adjusted basis, step by step.
By Lucas Andersen — Last updated April 9, 2026
Box 19A on your Schedule K-1 reports the total cash distributions you received from the partnership during the tax year. Under IRC §733, cash distributions reduce a partner’s outside basis dollar for dollar. This is the quarterly distribution deposited in your brokerage account — but it is NOT a dividend. It is NOT reported on a 1099-DIV. It is a partnership distribution that reduces your cost basis, deferring tax until sale or until basis reaches zero.
The distinction matters because 1099-DIV dividends do not reduce your cost basis. If you hold both a C-corp stock paying dividends and an MLP paying distributions, only the MLP distributions erode your basis. Two investments that deposit identical quarterly cash into your account have fundamentally different tax mechanics.
19A — Cash distributions. This is the line virtually all MLP investors see. It includes all quarterly cash distributions received during the calendar year. 19B — Marketable securities. Distributions of marketable securities in kind. Rare for publicly traded MLPs; more common in private fund liquidations. 19C — Other property. Non-cash, non-securities distributions. Essentially never appears for retail MLP investors. For typical MLP holders, only Box 19A will have a value.
The IRS Partner’s Adjusted Basis Worksheet (referenced in the Form 1065 K-1 instructions) processes distributions on Line 13. The worksheet sequence matters: (1) start with beginning-of-year basis; (2) add income allocations (Box 1 if positive, Boxes 2–11 as applicable); (3) add increases in your share of partnership liabilities (Item K); (4) subtract non-deductible expenses and other decreases; (5) subtract losses (limited to basis before losses); (6) THEN subtract distributions on Line 13. If Box 19A exceeds your pre-distribution basis at this point, the excess becomes taxable gain under §731(a). The worksheet enforces this ordering to ensure losses are limited before distributions are applied.
IRC §731(a)(1): a partner recognizes gain to the extent that cash distributions exceed adjusted basis. If your pre-distribution basis is $400 and Box 19A is $1,050, the first $400 reduces basis to zero and the remaining $650 is taxable as long-term capital gain (assuming you’ve held more than one year). Basis cannot go below zero. See what happens when MLP basis reaches zero for the full mechanics.
Projecting future basis erosion from a flat distribution assumption is unreliable. EPD has increased its distribution every year since 1998. The table below shows actual Box 19A amounts per unit and the approximate basis reduction for a 100-unit position.
| Tax Year | Box 19A / Unit | Total (100 units) | Cumulative Basis Reduction |
|---|---|---|---|
| 2020 | $1.78 | $178 | $178 |
| 2021 | $1.80 | $180 | $358 |
| 2022 | $1.87 | $187 | $545 |
| 2023 | $1.98 | $198 | $743 |
| 2024 | $2.04 | $204 | $947 |
Note: Actual basis reduction depends on net K-1 adjustments (income allocations partially offset distributions). Box 19A alone overstates the net erosion. Use the K-1 Basis Tracker with your actual K-1 data for precise results.
Distribution growth is the primary driver. EPD has raised its distribution annually, so Box 19A trends upward. But distributions can also decline: PAA cut its distribution by 50% in 2020 (from $1.44/unit to $0.72/unit), and Box 19A dropped accordingly. Variable-rate MLPs like CQP fluctuate with commodity prices. The takeaway: do not project future basis erosion using a single year’s Box 19A. Use 3–5 years of actuals as a baseline range.
Box 19A should match the total distributions your broker reports for the calendar year. If it doesn’t, investigate three common causes: (1) Partial-year holdings — you bought or sold mid-year, so Box 19A reflects only the quarters you held. (2) DRIP (distribution reinvestment) — reinvested distributions are still distributions. Box 19A includes them even though no cash hit your account. (3) Unit adjustments — reverse splits or unit consolidations can create small rounding differences. The K-1 controls for tax purposes, not the broker statement.
Box 19A is not taxable income. Your taxable income from the MLP comes from Box 1 and other income/loss boxes. Distributions (Box 19A) and taxable income (Box 1) are two separate concepts that both affect your basis but through different lines of the worksheet. Many investors confuse them. Box 1 can be negative (a loss) while Box 19A is positive (cash received) in the same year — this is normal for MLPs and is the mechanism that creates tax-deferred distributions.