Schedule K-1 (1065) overivew shows $0 Income..did I mess up? (Masterworks)

[YSTRBY]

Hello!

I've completed my Schedule K-1 (Form 1065) and the overview of income shows $0 next to my K-1. I'm assuming I've done something incorrectly. Any thoughts? This is for the art investing service Masterworks which sold a piece that I was a "parnter" in (purchased "shares").

Most steps were clear, but a few I coulldn't figure out are below. Not sure if this will make any difference.

Box 11, Code A Detail for $515 (none  below made sense to me, so I currently have this left blank)

-Income for loss from REMIC

-Excess Inclusion from REMIC

-Section 212 Expense from REMIC

-Other Portoflio Income (Loss) to be Reported on Schedule E, Page 2

-I have another Description item

Box 13, Code w Detail for $17 (none below made sense, so I currently have this left blank)

Early Withdrawal Penalty

Investment Interest Expense

Miscellanous Itemized Deductions

Nonpassive deductions to be reproted on schedule 3, page 2

section 754 depreciation

taxes and state income tax witheld

i have another description

describe the Partnership:

Should I be listed as "all of y  investmetn in this activity is at risk"? This was selected by default..

[DavidD66]

For Box 11, indicate "Other Portfolio Income...".  For Box 13, "I have another description" - Deductions—portfolio income.  "All of my investment in this activity is at risk" is correct.  

[YSTRBY]

Thank you, @DavidD66,

What should I enter as the description for Box 11? (see below). Should this rectify the $0 income I see on the overview page?

For Box 11, when I choose "Other Portfolio Income..." I get a follow up prompt: 

"Other Portfolio Income .." to be reported on Page 2 of Schedule E

Enter Description __(what should this be?)

Enter Amount___(assuming this should be the $515?)

[Rick19744]

What box is checked on your K-1 Part II line G?

Is box D checked?

[YSTRBY]

Hi @Rick19744 / @DavidD66 , 

What box is checked on your K-1 Part II line G? Limited Partner or other LLC Member

Is box D checked? Yes (publicly traded partnership)

If helpful, here's my Token Number: 1097850

[Rick19744]

Based on your follow-up responses:

• You have invested in a PTP and there are special and complicated rules on how these work.  PTP's are each tracked separately from other passive activities and losses from a PTP can only be used to offset income from that specific PTP; and losses cannot go below zero.
• Your K-1 should have a statement as to Box 11 code A.  Most likely you should indicate "Other portfolio income".  While your $515 could be a loss, I am assuming it is income.
• Your K-1 should have a statement as to Box 13 code W as well as this amount is considered some type of  "other deduction".
• You should be tracking your basis in this investment and your K-1 should be reflecting a tax capital basis.  If your end of the year figure in Section L is positive, then you are able to indicate that you are at-risk.
• If your activity on the K-1 generates a loss, then this loss will be suspended and carried over to next year.  While we don't have all the facts, nor can we see the K-1, the amounts from the K-1 activity can be reflected in various places on your tax return.

[YSTRBY]

@Rick19744Thanks for this.

For Box 11, when I choose "Other Portfolio Income..." I get a follow up prompt: 

"Other Portfolio Income .." to be reported on Page 2 of Schedule E

Enter Description __(what should this be?)

Enter Amount___(assuming this should be the $515?)

Confirming some of your bullets below, and several questions for you basis:

1) Is the "begining capital account" dollar value seen in section L of my K-1 the basis in the investment?

2)I have that documented with Turbotax, along with the next income and withdrawals/distributions. Are you suggesting I need to track somewhere additionally?

3) With the above and below in mind, Is it still 

• $515 is income. 
• I've used "Other deduction" for Box 13 Code W
• Section L is positive 

[Rick19744]

@YSTRBY 

Responses to your follow-up:

• I can't tell you what the description should be.  As noted previously, this information should be included with your K-1; either in notes to the K-1 or a separate letter that accompanied the K-1.
• Yes, the amount should be the $515
• Section L technically represents your tax capital and is most likely close to your tax basis.  You should be focusing on "end of the year" tax capital.  Since you noted this is still positive, then you are "at-risk".