I got a Schedule K-1 from United States Oil Fund, LP (USO) with a 2020 Sales Schedule.
The Sales Schedule shows a bunch of lines of transactions. The last line is Total as following:
(1) Units Sold: 77,8750
(2) Sale Date:
(3) Sales Proceeds:
(4) Purchase Price/Initial Basis Amount: 3,216
(5) Cumulative Adjustment to Basis: -97
(6) Cost Basis: 3,119
I studied this video and learned I need to adjust my cost basis on 1099B.
Say my 1099B 1(e), Cost or Other Basis for USO is showing 5000.
My question is when I try to enter the cost basis on Form 8949, do I
(1) enter the adjusted cost basis which is 5000-97 = 4903 on Form 8949 Part I 1 (e)
or
(2) enter 5000 on Form 8949 Part I 1 (e), and -97 on 1 (g)
If (2) is correct, which code should I use for Form 8949 Part I 1 (f)?
Thanks.
Your broker's 1099-B probably did not report the basis of the trade to the IRS (code B or E on the 1099). In that case, just change 5000 to 4903 directly on the form. No code needed.
If they in fact reported the incorrect amount to the IRS (code A or D), which would be unusual, then you'd want to open the Capital Gain (Loss) Adjustments Worksheet (in form mode) and in Part III check off "Form 1099-B reports an incorrect basis" and enter the correct amount there. Note that you don't need to do this in the case where they didn't report your basis, because They didn't report your basis, so there's nothing to correct.
Also note that there is probably a way to do this through the interview as well, but I'm only familiar with the Forms approach.