I disposed of a K-1 partnership and received a 1099-B. Turbotax is asking about this 1099B and the K-1 separately. Why is TT automatically populating Form 8949 line 10?

[speedway121]

The 1099-B section of TT populates form 8949 and Schedule D Part II line 9 correctly as per the 1099-B.

When I get to the questionaire on TT for the K-1 Partnership, it asks if I disposed of the partnership (or any portion of it). I fill in the same info as in the 1099-B above, BUT TT puts this info on line 10 of schedule D, essentially duplicating the info on line 9 of schedule D populated by the 1099 B. WHY is TT double populating the schedule D? The 1099B and the K-1 Partnership disposal are the same item, but the tax return is showing as 2 different. 

[TaxGuyBill]

Was this a Publically Traded Partnership (PTP) or Master Limited Partnership (MLP)?

[speedway121]

@TaxGuyBill PTP. It seems like TT is double counting the info on the K-1 and 1099B (they are the same info). Which do I use? I am worried since the IRS received both a 1099B and a K-1. I suspect the best section to put this info in is in the K-1 section (however I dont know what the IRS will do if I dont report the 1099B, will they know they are related?). I need to report both, dont want an audit... any ideas. Why does TT handle it this way?

[Critter]

Again ... ONLY enter the sale from the 1099-B  using the info from the K-1.

[Critter · Accepted solution]

Do  NOT enter the sale info again in the K-1 section if it was already handled in the 1099-B section ...remove the purchase/sale price & date. 

[speedway121]

@Critter#2 Thank you! Just so I am clear- what I am doing then is entering everything from the 1099 B section, and in the K-1 section, I am selecting the following: "Describe the Partnership" Check boxes on 1) This is a PTP 2) Disposed a portion of my interest in the partnership during 2017
THen
on the "Tell us about your sale- what type of disposition was this?" I Selected "sold partnership interest"
Then
on the "Enter sales dates"
I put in Purchase Date "Various" <- this was bought on various different days several years ago
Sale Date: 3/24/2017 (all sold on the same date)
Then on the
"Enter Sale Information"
I am FORCED to enter in 0 in the following fields: "Sale Price,  Partnership Basis" Else TT flags this and forces me to fix it. My concern is that this 0 amount flows into some form which will trigger a flag on the IRS side, since obviously it was not sold at $0 and basis was not $0.

I am leaving all other fields empty "Selling Expense, Ordinary Gain, 1250 Gain"  I am leaving all of these empty.

Correct?

[Critter]

Ok ... I see where your real issue is. You are trying to follow the program and enter the sale twice ... if the 1099-B has the sale then you do NOT also enter it in the K-1 section no matter what the program says ... you ONLY use the K-1 section if it was not already handled earlier in the system ... remove the second entry and life will be much better.

[speedway121]

@Critter#2 Thank you for the guidance. Here is what I ended up doing - 1) in the 1099B section, I manually calculated the cost basis (there were cumulative adjustments to the tax basis every year) and I put the cost basis in on the 1099B section. This section was automatically populated with the proceeds # so TT calculated the total gain. My 1099B form from the broker had a header on it that said "Applicable check box on Form 8949 =X" "Type of gain / loss NOT determined" - I told TT this was "X" -> unknown holding period and Box 2- type of gain "L - long term more than a year (which it is)"

For the 2nd part of this 2) under the K-1 partnership questionnaire part of TT, I DID NOT check the box that said "I disposed of this". Instead I pretended that I still had interest in it (and TT will probably ask about this again next year). TT DID need me to fill in all the K-1 details, such as the partners share of income ($28 in short term capital loss as reported on the K-1) etc. I don this step is avoidable as the k-1 is reported to the IRS.

Does this sound right? Am I missing something?
What exactly does the Turbotax questionnaire checkbox "I disposed of this" in the k-1 partnership section translate to in IRS forms?

[Critter]

That will work... and you will need to delete the K-1 shell next year.

[speedway121]

@Critter#2 Sorry for the following 2 questions 1) If I do not select "dispose" of this partnership, and there are losses to carryover, then what happens? I assume TT would have allowed me to take all the losses this year since I disposed of the k-1?

2) I pivoted to form 1065 and noticed that Line J (partners share of profit,loss,capital were never asked from me during the TT questionaire 'easystep'
Do you know if these lines are mandatory? This goes for Line L as well. I have this info available but TT never asked me for it during the questionaire. I looked at my 2016 return and these were left blank...