@bobp1426 wrote:
I agree, I should only be taxed on the short term gain of the 1099-B of the $700.
@bobp1426 The line above (with my emphasis) is where the problem lies. You only pay tax on a total of $700, but you don't control the tax rate. You're going to pay long term rates on $492, and short term rates on $208 ($328 from K-1 and $120 loss from 1099-B after basis adjustment). Your tax should go down: because of the way the IRS handles straddles, part of your short term gain became long term gain. That's a win for you.
Note that it can go the other way too. If the partnership had reported Ordinary Income, part of your gain would have been taxed at normal, W-2 like levels.
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**Note also, I'm not a Tax Preparer/CPA. Just a volunteer, seasoned, TurboTax user.
Use any advice accordingly!
