maybe for the k-1 sales info there MAY be a column on the sales schedule that says any of the following (the amount would also likely be included in box 20AB of the k-1):
"Gain subject to recapture as ordinary income" or
"Section 751 gain (ordinary income)"
other wording is possible
at the bottom of the column, it might say any of the following:
"form 4797 part II line 10"
"form 4797 part II line 10 form 8949 column G"
"form 4797 form 8949"
this is ordinary income resulting from the disposition of the partnership it is not included on any line of the k-1 other than possibly line 20.
so to get it to flow to the 4797 part II line 10 you have to in the k-1 sales section yo have to indicate this as the sales price and also on the ordinary income line
for the 8949 you have two options
1) from the sales schedule add the total adjusted cost basis and the amount reported as ordinary income and enter it as your tax/cost basis to arrive at the proper capital gain/(loss) amount
2) from the sales schedule enter the total adjusted cost basis in the cost basis column in the adjustment column enter this ordinary gain as a negative amount and use code B
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your broker DOES NOT report the correct tax basis on the 1099-B. the only number it has is what you paid when you bought it. (that's why the type is either B or E - tax basis not reported to IRS). It does not adjust this amount for the partnership activity which must be done otherwise the gain/loss you report will be wrong.
