sec 1256 contracts and straddles

[vram]

I received a K1 form with some capital gains (for a publicly traded ETF - UVXY) in section 11 C - Section 1256 contracts and straddles. These show up as capital gains in my tax return software. My 1099-B also shows some capital gain for this ETF. Should I increase the cost Basis of my ETF while reporting capital gains, to compensate for gains reported in K1 form?

[vram]

Thanks for your reply.

I originally sold my shares for around $2500 loss.

Section 11C in my My K1 form shows $5115 gain. According to the K-1 sales schedule, my cost  basis has been decreased by $2568. So effectively I am paying taxes on the $5115 gain, and a tax on the profit due to decreased cost basis.

I am confused why I am paying taxes on $7600 when I actually lost $2500 on the trade.