Correct. My comment was about actual qualified dividends, not income from PTPs but I might not have been clear on that.Pinochet said:
Isn't EPD a PTP? Those distributions aren't dividends and the tax treatment is very different. Each distribution lowers your basis (no immediate tax) and then when you do sell, there is ordinary income you have to pick up first. That means those dividends work their way into the gain or loss at the end. In a lot of cases, that can give you weird answers like ordinary income and capital losses at the same time for something you've owned for years.
PTPs are just as you indicate and I cannot tell you the number of times clients sold a PTP, had substantial ordinary income and a substantial capital loss, of which only $3,000 was deductible (absent any capital gains that the capital loss can offset). Plus you have all the tracking over the years of unallowable losses (ordinary and 1231 losses). They are a mess in many ways!