Understanding K-1 Box 19 Distributions: What 19A and 19B Actually Mean
Box 19 on your Schedule K-1 reports cash and property distributions. Here's how to read it, reconcile it with your broker, and apply it to your basis calculation.
Computed per the site methodology · Corrections log
What Box 19 Reports
Box 19 on Schedule K-1 (Form 1065) reports distributions you received from the partnership during the tax year. It has two sub-boxes:
Box 19A — Cash and Marketable Securities
The total cash distributions paid to you during the calendar year. For publicly traded MLPs, this is the sum of all quarterly distributions. This number should match the total distribution payments shown on your brokerage statement.
Box 19B — Distribution Subject to §737
Distributions of property other than cash or marketable securities. This is rare for publicly traded partnerships and is almost always zero for midstream MLP investors.
For the vast majority of MLP investors, only Box 19A matters. It's the single most important number for basis tracking because it directly reduces your outside basis each year. For the conceptual picture — why these are return of capital rather than dividends — see how MLP distributions work.
Reconciling Box 19A with Your Broker
Your Box 19A amount should match the total distributions your broker shows for the year. If they don't match, the most common reasons are:
- Mid-year purchases or sales: If you bought or sold units during the year, your K-1 only reflects distributions for the period you held units. Your broker may show a different total if it includes partial-quarter payments.
- DRIP (distribution reinvestment): If you reinvest distributions, Box 19A still reports the full cash equivalent. The reinvestment is a separate transaction (a new purchase) that increases your basis.
- Multiple lot tracking: Your broker may split distributions across tax lots, while the K-1 reports one total.
Why Your Broker Says "Dividend" but the K-1 Says "Distribution"
This is one of the most common sources of confusion for MLP investors. Your brokerage statement may label MLP payments as "dividends," "qualified dividends," or "non-qualified dividends." These labels are incorrect for MLPs.
MLP payments are partnership distributions under IRC §731. They are not dividends under IRC §301. The distinction matters enormously:
Dividend (§301)
- Taxable when received
- Reported on 1099-DIV
- No basis impact
- Qualified rate (0/15/20%)
Distribution (§731)
- Not taxable when received*
- Reported on K-1 Box 19
- Reduces your basis
- Tax deferred until sale
*Unless your basis has reached zero, in which case excess distributions are taxable as capital gain.
This is why your broker can't track your real basis — they're treating MLP distributions as dividends, which have no basis impact. The K-1 tells the real story.
See Your Real Basis
Enter your K-1 data and see your IRS-adjusted basis in seconds. Free, no signup required.
In the K-1 tracker, typing your numbers in uploads nothing; an uploaded K-1 PDF is read by a third-party AI provider. Privacy
Open K-1 Basis TrackerHow Box 19 Interacts with Other K-1 Items
Your basis change for the year is not determined by Box 19 alone. The IRS Partner's Basis Worksheet combines several K-1 line items:
- Start with prior year ending basis
- Add: Box 1 — Ordinary business income (or reduce for losses)
- Add: Other income items — Boxes 2-11 (interest, dividends, capital gains allocated to you)
- Add: Liability increases — Item K (your share of partnership debt)
- Subtract: Box 19A — Cash distributions
- Subtract: Liability decreases — Item K
Box 19A typically causes the largest single reduction. For a midstream MLP paying $2.50/unit in annual distributions, that's a $2,500 basis reduction per 1,000 units — every year.
See How Box 19 Affects Your Basis
Enter your K-1 Box 19A amount alongside other key figures to see the net impact on your basis.
Box 19 Distribution Breakdown
See exactly how your K-1 data affects your basis, step by step
Simplified view using Box 1 and Box 19A only. Full calculation includes liabilities (Item K), other income boxes, and deductions.
Why the Character of the Distribution Matters
Not all distributions have the same tax consequence. The character depends entirely on your current basis:
Basis > Distribution Amount
The distribution simply reduces your basis. No tax due now. This is the typical case for the first several years of ownership.
Basis = Zero (or would go below)
The excess amount (distribution minus remaining basis) is immediately recognized as capital gain under §731. Your basis stays at zero.
This is why tracking basis annually matters. You need to know when you're approaching zero so you can plan for the tax consequences of continued distributions.
Know Where Your Basis Stands
Box 19 distributions have been reducing your basis every year. See your actual IRS-adjusted number before you file or sell.
In the K-1 tracker, typing your numbers in uploads nothing; an uploaded K-1 PDF is read by a third-party AI provider. Privacy
Open K-1 Basis TrackerKey Takeaways
- 1.Box 19A reports total cash distributions — it should match your broker's distribution records
- 2.Box 19B (property distributions) is almost always zero for publicly traded MLPs
- 3.Your broker labels these as "dividends" — they are not. They are partnership distributions under §731
- 4.Distributions reduce your basis dollar-for-dollar and are not taxable unless basis is zero
- 5.Box 19A works in combination with Box 1 and liability changes to determine your net annual basis change
Frequently Asked Questions
Box 19A reports cash distributions you received from the partnership during the tax year. This is the total cash paid to you — typically matching your brokerage distribution records. Box 19A distributions reduce your cost basis dollar for dollar.
Box 19A reports cash distributions. Box 19B reports property distributions (non-cash). For most MLP investors, Box 19B is zero — property distributions are rare in publicly traded partnerships. Both reduce basis.
Usually yes, but small timing differences can occur around year-end distributions. If the amounts differ by more than a few dollars, check whether a December distribution was recorded in a different tax year by your broker versus the partnership.
Distributions in Box 19A reduce your outside basis. If distributions exceed your basis, the excess is recognized as capital gain under §731(a). This is how return-of-capital distributions work — they're not taxed when received but they lower your basis, increasing your gain when you eventually sell.
Related Articles
How MLP Distributions Erode Your Basis
The year-by-year math behind basis decline
Why Your Broker's Basis Is Wrong
Your 1099-B shows one number, the IRS expects another
Holding MLPs in an IRA: The UBTI Trap
Why retirement accounts and MLPs don't always mix
Energy Transfer (ET) K-1 Guide
Three entities with separate Box 19 reporting
Enterprise Products (EPD) K-1 Guide
The most widely held MLP in America
MPLX K-1 Guide
Marathon's high-yield MLP — fast basis erosion from distributions
MLP Tax Center
All guides and tools
Track Your Real Basis — Free
Enter your K-1 data and see your IRS-adjusted basis in seconds. No signup required.
Open K-1 Basis TrackerIMPORTANT: This tool provides estimates for educational and informational purposes only. It does not constitute tax, legal, or financial advice. You are solely responsible for the accuracy of information you enter and for all tax filing decisions. Always consult a qualified tax professional (CPA, EA, or tax attorney) before making tax decisions based on this tool's output.
Lucas Andersen is not a CPA, Enrolled Agent, or tax attorney. This tool is not a substitute for professional tax preparation.