Hello, and thank you - this was very helpful. I want to make sure I am fully understanding, so I will use an example.
Purchase price: $10
Volume: 100 shares
Price at 12/31/2016: $4
K-1 income: $20
Sale price at 6/6/2017: $7
For 2016:
I will file the K-1 as part of my federal/state tax filing, and it will reflect income of $20.
For 2017, in this example:
I will sell the stock.
I purchased 100 shares at $10, or a total of $1000
I sell 100 shares at $7, or a total of $700
My loss is = Purchase Amount + Income - Sale Amount = $1000 + $20 - $700 = ($320) LOSS
Which means that net, net, my loss ends up being exactly Purchase Price - Sale Price, and in fact, in reality, the Income from the K-1 had no bearing.
My follow up questions:
a. Did I interpret your guidance correctly?
b. Is there any IRS document / tax law that you can point me towards so I can save it as 'proof' if the tax man com'eth
c. Is there anything that I can do TODAY (ie, for the 2016 tax filing) to off-set this K-1 Income?
Thank you!
