Part of the reason this is confusing is that we don't have all the facts:
- Can you confirm that this is not a final K-1 and that you will continue to receive K-1's from this fund in the future
- Your wording "Section 743(b) negative adjustment" is confusing.
- A Section 743(b) adjustment reported on line 13 is a deduction against the income from the operations
- Your terminology seems to imply that this amount is income; negative adjustment on line 13 implies to me that this is a negative amount on line 13 instead of a positive amount. Line 13 should be a positive amount as these are deductions.
- The purpose of the Section 743 adjustment is to adjust for "gain" that you paid for when you became a limited partner. This adjustment should continue over the length of time based on the assets it was associated with. This won't necessarily apply to the capital gain that is passing through at this point in time. This will apply to the overall gain / loss over the life of the fund.
- Do you have amounts in boxes 1,2 or 3?
- Make sure you are maintaining a tax basis schedule as you will need this and the sooner you begin maintaining this the better.
*A reminder that posts in a forum such as this do not constitute tax advice.
Also keep in mind the date of replies, as tax law changes.
