Investors & landlords

@entsrgn19 Not sure why the previous question was deleted, but "the correct cost on the 1099b is purchase price + adjustments to basis + ord gain " is the formula.  If a number is negative, then you add a negative number.

Using your numbers:

Cumulative adjustment to basis (column 5): -$12,932

Cost Basis (column 6): $87,155

Gain Subject to Recapture (Column 7): $18,229 

Your basis on the 1099B = 87,155  +   -12,932   +    18,229 = $92,452

If you sold for $100,000

• your Sched D would show 100,000 - 92,452 = $7,548
• form 4792 will show the Gain Subj to Recap of 18,229
• so your TOTAL gains on the sale will be $7548 + 18,229 = $25,777

Where does that come from?  The -$12,932 adjustment means that the partnership gave you $12,932 in benefits while you owned it.  Some of that is cash they sent you.  Some of it is deductions on your past tax returns.  And some of it is suspended losses that you'll see show up on Sched E when you complete this years return.

So over the course of your ownership, you received $100,000 in cash plus the $12,932 above, or 112,932 in total.

You paid $87,155 originally

Your total profit is 112,932 - 87,155 = $25,777, exactly the gain your reporting this year on the sale.