>> Sales don't get reported on a K1 so don't that defense wont work with the IRS.(although there may be a box checked Final l K1). Sales get reported by the MLP on a Sales Schedule which the IRS does not get. Sales DO get reported on a 1099B by your Broker.<<
Exactly right! If you delete your proceeds, the IRS will be on your ass. The basis is adjustable to your heart's content. My K1's, where I sold them, include a calculation sheet for your proper tax basis. My broker, as all should, does not and I think will not in the future provide a basis for MLP's.