@Sis-Q You zeroed out the "Capital" gain on the K-1, not the "Ordinary" gain. The Ordinary Gain you entered in the K-1 is being reported on Form 4797, so you're paying tax on it.
The issue is that the "Cumulative Adjustments" that reduce your basis include 2 different types of adjustment: some that are taxed at Capital Gain rates, and some that are taxed at "Ordinary" (or regular W-2 like) rates. So they give you the total adjustments (e.g. -$30), and then they also tell you how much of that was "Ordinary" (e.g. $20). So you pay Ordinary tax on the $20 via form 4797, and you back it out of your 1099-B so you don't report it twice.
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**Note also, I'm not a Tax Preparer/CPA. Just a volunteer, seasoned, TurboTax user.
Use any advice accordingly!
