They are entirely different. The k-1 income or loss affects the capital gain/loss on the 1099-B. Most likely, you sold a Publicly traded partnership or Master limited partnership. Included in that k-1 package there should have been a unit sales worksheet that's required to properly report the capital gain/loss on disposition. The 1099-B DOES NOT reflect your correct tax basis.
if all units were disposed of here's guidance on reporting
Please follow these instructions. Incorrect entries can result in entering the sale twice or incorrectly. Also, see the sales schedule that was included with the K-1
Enter the K-1 info
Check the PTP box (should be checked on the K-1)
Check final K-1 (s/b marked on actual k-1) if you held no units at year end
Check sold or otherwise disposed of entire interest
On the k-1 disposition section for sales price, use the ordinary income. It's line 20AB on the K-1. There would also be an ordinary income column on the sales schedule with the same amount. if there is none then the sales price is zero. The numbers I’m using represent the line numbers in forms mode (desktop only)
5. Sales Price = line 20AB (1065 k1)
6. Selling expenses = 0
7. Basis = 0
8. Gain is computed and should be same as the sales price.
9. Ordinary gain = enter same as sales price
This amount flows to form 4797 line 10 and is taxed as ordinary income. This step is necessary so any suspended passive losses are now allowed.
10,11,12 should be blank
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 originally paid, which is incorrect.
The correct tax basis is:
What you originally paid, should be the same as what is on 1099-B as cost (unless there was a merger or something) . 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, if any. The result is your corrected cost basis for form 8949.
Some other things. Look at lines 20AB. 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.
state laws vary
