PTP sale 1099B Box A and K-1 question

[guohaiyi0527]

@nexchap  There is little fine print that I did not even notice before. Thank you so much!!!😀

[guohaiyi0527]

One question raised up regarding this is about wash sales. Do I need to adjust anything regarding the wash sale? There was some wash sale loss disallowed amount in this transaction. After I adjust the cost basis according to K-1, the cost basis become negative for some reason:(

[nexchap]

@guohaiyi0527 Yes, wash sale rules still apply and your brokerage statements may not account for all of them since the K-1 adjustments can sometimes turn broker Cap Gains into actual cap losses.  Working through the mechanics can be pretty tricky, and TT won't be any help.  Note that adjusting for wash sales only increases the basis of the replacement shares, so can't drop the adjusted basis below 0.  Example:

• Sell 1 share of xyz for $150.  Basis is $200.  Cap loss is $50.
• Loss is disallowed, because you bought another share of xyz within 30 days for $20.  The new basis for that new share is $70 ($20 + disallowed loss of $50).
• You eventually sell that share for $20 (what you originally paid for it).  Your Cap loss is $50 again (20-70).