@nexchap, thanks again for your help over the past few days.
BLUF: Fidelity makes it difficult to efficiently file taxes for PTPs.
Resolutions, for the benefit of the community:
A) Fidelity (broker) is reporting basis to the IRS, i.e box A/C is checked instead of B/D.
Fidelity agrees that they should not report basis to the IRS, though may continue to do so. Their "not tax advice" is to indicate that the broker is reporting an incorrect basis and correct it on the 8949.
B) What are Tax Support Package's (K-1 Preparer) capabilities to track wash sales?
Tax Support Package can adjust the purchase date and purchase price of lots. It is up to the partner to calculate the new purchase price and inform the partnership of changes. This will result in correct basis and long/short percentages on the K-1 supplemental sales schedule, though code W disallowed loss is not taken into account and must be tracked by the partner.
That said, Tax Support Package repeated the above three times, ending each with a bit of what I perceived as hesitation. They also told me to contact Fidelity if I believed the basis is wrong, which seems more like a CYA than anything. I feel like I've done my due diligence and plan to correct the date and price with Tax Support Package for the triggering lots.
C) Fidelity is not disposing lots proportionally.
Fidelity does not have automated support for proportional disposal. The trader must specify lots or reassign lots before trade settlement.
D) Fidelity is using actual cost method instead of average cost method.
Fidelity only supports average cost method for mutual funds.
