MinhT
Expert Alumni

Business & farm

I interpreted right. Globally, the income of $20 you report in 2016 will lead to less capital gain (or more capital loss) when you sell.
There is no specific IRS which addresses this situation. The IRS just says that as a partner you have to report your K-1.
The income is added to your cost basis (just as you add dividends received to the cost basis of a mutual funds).
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