Your taxes will balance out. Here's how:
- As a partner, you have to pay any taxes the partnership owes. So if the partnership receives $10 in INT, you owe taxes on it even if they didn't send you the $10. You pay this in Turbotax by entering the K-1 into the program, and it takes care of moving everything to the correct spots.
- However, when you sell your share of the partnership, your profit on the sale is different for a partnership. With regular stock, your profit would be [sales price] - [purchase price]. But with a partnership, your profit is [sales price] - [purchase price] - [all the stuff the partnership made you pay taxes on]. So if you paid taxes on $10 in INT, you're 1099-B profit would be $10 less.
To do this, you'll have to adjust the cost of your purchase on the 1099. Your K-1 from USO should have included a Sales Schedule showing instructions on how much to adjust it by.
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**Note also, I'm not a Tax Preparer/CPA. Just a volunteer, seasoned, TurboTax user.
Use any advice accordingly!
