the K-1 reports the partnership activity which is not reported by the broker
K-1 1065
Box 5 - 0 leave balnk
Box 8 - 210 enter
Box 11C - 1,541 enter
Box 13W - 10 enter
Box 20 B - 10 ignore
that partnership is reporting your share of its earnings is +210+1541-10
you may not have actually gotten any cash for this profit so it adds to your tax basis as shown on the sales schedule
this may help
MLP reporting k-1 and 8949
see the sales schedule that was included with the k-1
Enter the k-1 info
Check the PTP box
If total disposition proceed as follows:
On the k-1 disposition section for sales price use the ordinary income (sometimes you’ll see a column with the “751” or the words ”gain subject to recapture as ordinary income” 751 income reported could be zero
Cost is zero
Ordinary income is the sales price.
This info flows to form 4797 line 10 and is taxed as ordinary income.
Now for the 8949.
The broker’s form is probably coded as B or E – sales proceeds but not cost basis reported to the IRS. This is because the broker does not track the tax basis. It used what you paid originally which is not correct.
The correct tax basis is:
What you paid originally, should be the same as what is on 8949,
Then there is a column on the sales schedule that says cumulative adjustment to basis. If it’s positive add it to the original cost. If it’s negative subtract the amount
Finally add the amount of ordinary income reported above.
The result is your corrected cost basis for form 8949.
Some other things. Look at lines 20Z1. That number should be added to the ordinary income above for reporting the 199A (qualified business income from the PTP). You don’t have to enter this but then you lose out on a tax deduction = 20% of this amount.
