Thanks for your reply. Here are are few missing details:
> The ETN is "SVXY" a multi-futures contract wrapped in an ETN offered as a security i.e. Sect 1256 eligible.
> K-1 sent by the ETN provider along with a Sales Schedule; yes, the code/amount in box 11 is "C -$70K".
> 1099B sent by the broker/dealer. Trades are reported as regular securities; no1256 specificity. All trades are marked as ST and reported to IRS.
Yes, TT correctly reflects the K-1 1256 $70K loss on 6781, split as 60% LT / 40% ST = $42K / $28K which are then transferred to Sch-D as LT and ST entries.
The K-1 Sales Schedule shows how to manually adjust the basis (per trade) shown on 1099B which are reported on 8949 then transferred to Sch-D as a ST gains entry (in my case the basis per trade is up-adjusted to create a total extra gain of $70K on the 8949).
The issue is : When the 6781 LT/ST losses and the 8949 ST gain are combined on Sch-D, I end up with a term mismatch from offsetting standpoint. $42K LT loss + $28K ST loss from 6781 versus $70K+$15K ST gain from 8949. This mismatch generates a higher overall cap-gains $tax when compared to correctly term matched $tax. Note the inaccurate dual treatment of the "same economic asset" here! 6781 is showing LT/ST losses; 8949 is showing ST gains only for the "same" asset.
I guess one way to fix the mismatch would be to override the 60/40 LT/ST split on 6781 to a 100/0 ST but that would perhaps violate the formulaic form instructions?
Am I left with having to split the 100% ST gains on 8949 to 60/40 LT/ST gains? If yes, what is the correct way to accomplish this using TurboTax? I need to use the 1099B interview section but which adjustments should I use to split all ST to 60/40 LT/ST?
Are there other suggestions on how to fix the term mismatch which results in dual treatment regarding offsetting of LT/ST gain/losses for the "same asset" ?
