@nexchap Thank you so much for your response. I still have a question about how to adjust the cost basis reported in the 1099-B via K-1 information. So that I understand the full process you are recommending, the script of your example will look like this:
Via the TT K-1 interview - Enter Sales Information screen:
Regular Gain or Loss:
Sales Price: 0 (this will be reported to TT via the 1099-B)
Partnership Basis: (-100) (inverse of the Ordinary Gain listed in the K-1 sales schedule)
Ordinary Gain: 100 (as reported in the K-1 Sales Schedule as "...Recapture as Ordinary Gain)
AMT Gain or Loss:
Partnership Basis: (-97) (inverse of the AMT Gain/Loss Adjustment listed in the K-1 sales schedule)
Ordinary Gain: 97 (as reported in the K-1 Sales Schedule as "AMT Gain/Loss Adjustment")
Then, I will enter the brokerage 1099-B information for the sale in TT. The cost basis reported in the 1099-B must be adjusted by the amount listed in the K-1 considering the following:
- If the K-1 shows a loss, I will increase the amount of the 1099-B cost basis by that amount so I'm not paying taxes on the K-1 loss.
- Inverse, if the K-1 shows a gain, I will decrease the amount of the 1099-B cost basis by that amount so I'm paying taxes on the K-1 gain.
- Correct?
Question: For the 1099-B cost basis adjustment, is the K-1 loss/gain reported in box L under "current year net income (loss)" OR in the K-1 Sales Schedule under "Cumulative Adjustments to Basis"? For me, these two numbers are different.
