Hi @nexchap Thanks again for your response. I have some additional questions on your guidance
"On the rest of the K-1 interview, you'd enter the values and line items as reported."
I don't have much info on my K1 form. Below are all the info I have in my K1 form. If I report $1800 to Part III box 11 (what's on my K1 form) in turbo tax, my tax due amount will increase and this $1800 is taxed with a default of 60% as short term and 40% as long term. This is not correct because I held majority of these shares for more than one year. It should be more like 90% as long term and 10% as short term, but I can't adjust in the K1.
Info on my K1 form
Part II section L
Beginning capital account: $5,000
Current year net income(loss): $2,000
Withdrawals and distributions: $7,000
Part III
11 Other income (loss): $1,800 (code "C")
13 Other deductions: $200 (code "W")
"Note that the line 13 "other" deduction of $200 is going to need more info: it could go to a variety of places on the return, so you'll be asked to provide an explanation of what it is. Only the K-1 preparer (or the K-1 fine print) will be able to answer that."
In my K1 form instructions, it says line 13 with a code "W" means "trader expenses". In turbo Tax, it did ask me for more details on code W however I don't see this description as an option, so I selected "I Have Another Description Item" and entered "trader expenses" as the description. Is this the right way to handle this?
For the cost basis - in my Sales Schedule, I have
- Purchase Price/Initial basis amount (column 4):$5000 (which is close to the money I spent to purchase all the shares (the number I got from my Etrade account is slightly higher than this, about $20 difference)
- "Cumulative adjustments to basis" (column 5): $2000
- "Cost Basis" (column 6): $7000, which equals to column 5 plus column 4
So $7000 would be the correct cost basis?
