Hi hbI3973. Thanks for the info. I was on another thread about the same subject and your link verifies what should be done: add to the cost basis on the 1099-B entry the income or adjustment basis from the K-1 Sales Schedule. Here is what I did in TT with the help of "Nexchap" from the other thread https://ttlc.intuit.com/community/taxes/discussion/1099-b-and-k-1-form/00/2188673/page/2
The starting point was the 1099-B for this fund showed a cost of $2400 and sale was $3100, or a net income of $700. On the K-1 Sales Schedule, the cost was $2400 but the sale was $3220 and the Adjustment to Basis was shown as $820.
In the TT interview, I followed the steps and entered partnership name, etc. Then in the screen "Enter Capital Account Information" I entered all the K-1 Sales Schedule information. The next Screen "Describe the Partnership", I checked publicly traded and "Partnership ended in 2020" (since I sold all the shares). The next screen I checked "Complete Disposition", then next screen checked "Sold Partnership Interest". I then entered the dates I bought and sold. On the next Screen, "Enter Sale Information" screen, I followed the Instructions from TT for each line item.
Sales Price = 0 (right click on this entry and click "About Part II Line 5", TT says to Enter zero)
Selling Expense = 0 (nothing shown on K-1 Form)
Partnership Basis =0 (right click on this entry and click "About Part II Line 7", TT says to Enter zero)
Ordinary Gain =
1250 Gain =
Since Line 8 Ordinary Gain is calculated by TT, didn't enter anything. I then went back to Schedule D and adjusted the 1099-B Cost Basis for this item (Box B - Cost Basis Not reported to IRS) by adding the $820 (K-1 Adjustment to Basis) for a net cost basis total of $3,220. That shows a loss of $120, but in the end it balances out. Everything else seems to appear correctly. Form 6781 shows $328 short term and $492 long term, for this USO Partnership. Schedule D now shows for the Broker 1099-B for this transaction that I adjusted, a loss of $120. Best part, there are NO new Entries on Schedule D.
With the Short and Long Term split with USO's K-1, my taxes actually went down by $60. So I'll file an amended return with the new K-1 info with a note "Added additional information from USO K-1 Partnership for sale of all shares and made adjustments to 1099-B for this transaction due to K-1 information". Should be OK -
Here is what 2020 TT says for Lines 5 and Line 7 (see NOTE):
Line 5 - Sales price
Enter the selling price of the interest. For abandonment, enter zero. For liquidations, enter the value of the assets received. NOTE: If this is a disposition of a publicly traded partnership (PTP) or a master limited partnership (MLP) that was reported on a Form 1099-B, enter zero for both the sales price and the basis on lines 5 and 7 here and report the sale as normal on Schedule D, checking the appropriate "Reported on 1099-B" Box A or Box B. By reporting the sale of the PTP or MLP on Schedule D and entering zero as the sales price and basis on this K-1 Worksheet, the disposition will get processed correctly throughout the return.
Line 7 - Basis of partnership interest
Enter the partner's basis in the partnership here. Ideally, basis should be tracked each year on a worksheet in a permanent tax file. The program will assume that the basis for Alternative Minimum Tax purposes is the same as for regular tax purposes. You may change this entry, if this assumption is not correct. NOTE: If this is a disposition of a publicly traded partnership (PTP) or a master limited partnership (MLP) that was reported on a Form 1099-B, enter zero for both the sales price and the basis on lines 5 and 7 here and report the sale as normal on Schedule D, checking the appropriate "Reported on 1099-B" Box A or Box B. By reporting the sale of the PTP or MLP on Schedule D and entering zero as the sales price and basis on this K-1 Worksheet, the disposition will get processed correctly throughout the return.
Lines 8, 9, 10 and 11 - Gain (loss)
The program will calculate lines 8, 10, and 11. In the case of liquidations, enter any ordinary gain, as reported by the partnership, on line 9. Note: In the case of abandonments, the entire loss will be treated as ordinary loss and be shown on line 9.
