Final K-1 (Form 1065), Form 8949, Transactions reported on 1099-B

Forum|Forum|3 years ago
March 19, 2023
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I have my final K-1 form, this has the adjusted cost basis for the investments I sold this year. My brokerage has included these transactions on 1099-B as E - Long-term transactions reported Form 1099-B showing basis wasn't reported to the IRS. I am not including the brokerage reported transactions, but using the K-1 to report this sale. (Form 1065)

When TurboTax generates Form 8949 for these transactions "option F- Long-term transactions not reported to you on Form 1099-B" is checked. This needs to be "option E - Long-term transactions reported Form 1099-B showing basis wasn't reported to the IRS". I am unable to edit Form 8949 or change the reporting basis in another way.

Please help.

Best answer by nexchap

You'll want to use the broker's 1099-B, since they're reporting the revenue to the IRS. You simply edit the cost to the correct basis (using your K-1).

Because you're using the 1099-B for the Cap Gain, you'll want to keep this out of the K-1 interview. Do this by:

Enter $0 for Sales Price
Enter Ordinary Gain in the Regular and AMT columns
Enter the inverse of Ord Gain (e.g., -100 if Ord Gain was 100) in the Basis columns for Reg and AMT

On the next screen your Regular and AMT Gain/Loss will all be zero. This keeps TT from creating a new 1099-B.

nexchap

Answer

Level 9

You'll want to use the broker's 1099-B, since they're reporting the revenue to the IRS. You simply edit the cost to the correct basis (using your K-1).

Because you're using the 1099-B for the Cap Gain, you'll want to keep this out of the K-1 interview. Do this by:

Enter $0 for Sales Price
Enter Ordinary Gain in the Regular and AMT columns
Enter the inverse of Ord Gain (e.g., -100 if Ord Gain was 100) in the Basis columns for Reg and AMT

On the next screen your Regular and AMT Gain/Loss will all be zero. This keeps TT from creating a new 1099-B.

**Say "Thanks" by clicking the thumb icon in a post. **Note also, I'm not a Tax Preparer/CPA. Just a volunteer, seasoned, TurboTax user. . Use any advice accordingly!

tksprabuAuthor

Level 3

Thanks for your response. I did update like as explained by you - now TT does not generate 8949 for this.

Why can't I enter the sale price as actual and match the cost basis to get zero profit/loss? How that will be different from the method given above?

nexchap

Level 9

@tksprabu You also have to account for the Ordinary Gain. If you enter 100 for sales, 100 for basis, and 40 for Ord Gain, TT is going to calculate a Cap Loss of -40. That gets you an 8949 for that Loss, plus the potential for other errors because of a bug in TT.

Note that the important thing is to prevent TT from calculating any Cap Gain/Loss in the K-1 interview. You can enter the numbers in any way that makes sense to you, as long as the end result is $0 and no new 8949.

**Say "Thanks" by clicking the thumb icon in a post. **Note also, I'm not a Tax Preparer/CPA. Just a volunteer, seasoned, TurboTax user. . Use any advice accordingly!

Mike9241

Level 15

since you sold the PTP the broker reports on the 1099-B as cost the only number they have - what you paid originally. that is not your correct tax basis. accompanying the k-1 should have been a supplemental schedule which you need to use to report your correct tax basis