@ThomasM125 thanks for the suggestion about entering the corrected cost basis on 1099B:
corrected cost basis = cost basis from 1099B + gain subject to recapture as ordinary income from K-1
That results in the negative adjustment in Column G of Form 8949, as suggested in instructions on K-1 for Column 7 (gain subject to recapture as ordinary income):
Column 7: The instructions to Form 8949 are unclear in the determination of capital gain where total gain on the sale of units is partially ordinary gain. Reporting this amount as a negative adjustment in Column G of Form 8949 should generally result in the correct capital gain or loss.
What I'm unclear is, I still have two 8949 forms:
- 8949 generated based on the 1099B from my broker. This is where the corrected cost basis has been applied.
- 8949 generated based on the K-1 sale interview.
Some people suggest that the 1099B sale information from the broker should be deleted. That deletes the first 8949 form.
Could you clarify what is the right approach?
- Enter the corrected cost basis on 1099B from the broker as negative ordinary income. Keep two 8949.
- Remove the sale from 1099B from the broker. Keep 8949 from the sale on K-1.
The two approaches result in different tax refund.
Appreciate your help!
