Yes, Plains All American Pipeline (PAA) issues a Schedule K-1 — but Plains GP Holdings (PAGP) does not. These are different securities with different tax reporting, and most investors don't realize which one they own. PAA 2025 K-1 tax packages are expected online on or before February 28, 2026.
By Lucas Andersen — Last updated April 9, 2026
PAA (Plains All American Pipeline LP) issues a Schedule K-1. PAGP (Plains GP Holdings) issues a 1099-DIV — it elected corporate tax treatment in 2019. Both trade on Nasdaq under nearly identical names. The consequences diverge completely: PAA unitholders must track K-1-adjusted cost basis every year, face §751 ordinary income recapture at sale, and may owe state taxes in multiple jurisdictions. PAGP holders receive qualified dividends, report on Schedule B, and have no partnership basis mechanics at all.
How to check: Open your brokerage statement or position detail. The ticker symbol is the definitive answer — PAA is the partnership, PAGP is the corporation. If your year-end tax documents include a Schedule K-1 (Form 1065), you hold PAA. If you received a 1099-DIV, you hold PAGP. Some brokerages list both under “Plains” — the tax form type confirms which security you own.
Due to Plains’ pending NGL assets sale, PAGP expects to report positive current earnings and profits (E&P) for tax year 2026. This means part of PAGP’s distribution will be taxable as a qualified dividend — not return of capital. Prior years, PAGP distributions were primarily ROC because accumulated E&P was negative. The NGL asset sale generates a one-time gain that flips E&P positive. PAGP holders who assumed pure ROC treatment should plan for a taxable dividend component in 2026. This does NOT affect PAA unitholders — PAA’s tax treatment is governed by partnership K-1 mechanics, not corporate E&P.
PAA 2025 K-1s were released February 28, 2026. Download at taxpackagesupport.com/plainsallamerican. Phone: (866) 872-2829. Plains also offers a gain/loss calculator at taxpackagesupport.com for computing sale basis — useful if you sold PAA during 2025 and need the §751 split.
PAA’s distribution changed four times in five years. This is why flat-rate erosion projections fail for PAA. The table below shows quarterly rates, annual totals, approximate ROC percentages, and cumulative basis erosion for a 400-unit position purchased at $22/unit ($8,800 initial basis).
| Year | Q1 | Q2 | Q3 | Q4 | Annual | ~ROC% | Cumul. Erosion |
|---|---|---|---|---|---|---|---|
| 2019 | $0.36 | $0.36 | $0.36 | $0.36 | $1.44 | ~85% | $490 |
| 2020 | $0.36 | $0.18 | $0.18 | $0.18 | $0.90 | ~90% | $814 |
| 2021 | $0.18 | $0.18 | $0.18 | $0.18 | $0.72 | ~80% | $1,045 |
| 2022 | $0.18 | $0.2175 | $0.2675 | $0.2675 | $0.9325 | ~85% | $1,362 |
| 2023 | $0.2675 | $0.3150 | $0.3150 | $0.3150 | $1.2125 | ~85% | $1,774 |
| 2024 | $0.3150 | $0.3150 | $0.3800 | $0.3800 | $1.3900 | ~85% | $2,247 |
| 2025 | $0.3800 | $0.3800 | $0.3800 | $0.4175 | $1.5575 | ~85% | $2,776 |
After 7 years, cumulative basis erosion is approximately $2,776 on a $8,800 initial investment (32%). The broker still shows $8,800. The IRS expects approximately $6,024. A flat 5% annual erosion estimate would have predicted $3,080 of erosion — 11% off the actual number. The error compounds: erosion was $490 in 2019 (pre-cut), dropped to $230 in 2021 (peak of the cut), then accelerated to $529 by 2025 as distributions recovered.
Purchase: 400 PAA at $22 in January 2019. Initial basis: $8,800. Year 1 (2019): $1.44/unit distribution, ~85% ROC. Net erosion ~$490 (400 × $1.44 × 0.85). Basis: $8,310. Year 2 (2020): distribution cut Q2 from $0.36 to $0.18. Annual total $0.90, ~90% ROC. Net erosion ~$324. Basis: $7,986. Year 3 (2021): full year at $0.18/quarter, ~80% ROC. Net erosion ~$230. Basis: $7,756. This is the floor — erosion was slowest while the distribution was at its trough. Year 4 (2022): distribution restoration begins. Two increases. Annual total $0.9325. Net erosion ~$317. Basis: $7,438. Year 5 (2023): two more increases to $0.315/quarter. Net erosion ~$412. Basis: $7,026. Year 6 (2024): increases to $0.38/quarter by Q3. Net erosion ~$473. Basis: $6,553. Year 7 (2025): Q4 reaches $0.4175. Full-year $1.5575/unit. Net erosion ~$529. Ending basis: ~$6,024. Broker still shows $8,800. Gap: $2,776 (32%).
Box 1 (Ordinary income/loss): Typically negative for PAA — the partnership’s depreciation deductions exceed allocated revenue. This loss enters the basis worksheet on Line 11, not Line 4a. Box 19A (Distributions): Your total cash distributions for the year. This is the primary basis reduction. Item K (Liabilities): Bottom of K-1 page 1. Compare ending to beginning: increases add basis (Line 3), decreases reduce basis (Line 9). Box 20, Code Z: Your §199A qualified business income. PAA typically generates positive QBI — claim the 20% deduction on Form 8995. See the §199A QBI guide for details.
PAA owns $8B+ in depreciable pipeline and terminal assets. Under IRC §751, cumulative depreciation allocated to you through annual K-1s is recaptured as ordinary income when you sell — taxed at up to 37%, not capital gains rates. For a position held 7+ years, expect 30–50% of your total gain to be recharacterized as §751 ordinary income. The §751 amount appears on the Sales Schedule in your final K-1 — you do not calculate it yourself. See §751 Recapture Explained.
PAA operates primarily in Texas (no state income tax), which reduces nonresident filing obligations compared to MLPs concentrated in income-tax states. Additional operating states include Oklahoma, Kansas, California, Louisiana, and Wyoming (no income tax). PAA also has Canadian operations — check your K-1 state supplement for foreign source income. In the year you sell, disposition gain is allocated across all operating states, expanding filing requirements. See MLP State Filing Requirements.
Not knowing whether you hold PAA or PAGP — both trade on Nasdaq under similar names. Using a flat rate to estimate basis erosion when the distribution changed 4+ times in 5 years. Assuming the 2020 distribution cut “helped” your tax situation — it slowed erosion temporarily, but restoration accelerated it back. Ignoring Box 20 Code Z and missing the §199A deduction. Using broker basis when selling instead of K-1-adjusted basis. Not filing required state returns in Oklahoma and California.