K-1 vs 1099

Forum|Forum|2 years ago
March 13, 2024
1 reply
0 views

I do not want to double report capital gains. I sold out of all of my EFTs last year (mostly because the taxes on them are so complicated) and I do not want to double report my capital gains, but also want to make sure I am reporting them right. It looks like all of the capital gains were reported under the 1099 section when I uploaded my 1099 from Schwab. However, I am now working on the K-1s and it is asking if I sold out of the funds, which I did. When I enter the amounts, my refund is reduced proportionately, but those capital gains/losses were already reported under the 1099 section (they are the same amounts as the K-1s from what I can see). So I suspect I am double reporting them, but I also have no idea if I should report them under the K-1 section or the 1099 section. So what's the correct way to do this?

DavidD66

It sounds like you sold Publicly Traded Partnerships (PTP)/ Master Limited Partnerships (MLP). When you sell these, you have to report bptj your K-1 and your Form 1099-B transactions. PTPs make "dividend" payments which are in part a return of basis. Therefore, when you sell them you have to calculate both capital gain/loss - reported on Form 8949 and Schedule D, and ordinary income reported on Form 4797. Reporting the information in your K-1 package will result in ordinary income being reported on Form 4797 and a gain or loss on Form 8949. But you also have a 1099-B with the same sales that needs to be reported. Report the information on the 1099-B and then adjust to cost basis to equal the sales proceed, resulting a gain/loss of $0. The sales information on the 1099-B will match what the information the IRS receives and expects to see reported, and the correct gain/loss and oridnary income will be reported via the K-1 reporting.

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"

flyfresnoAuthor

Actually this was an ETF. I'm not sure why I am getting a K-1 for an ETF, but I am. I should provide some more info: Schwab *is* reporting the cost basis along with the capital gains on the 1099 to the IRS. So if I adjust it, it will be contrary to the info they see (it has a note right below the cost basis on the ETF clarifying that it's reported). Does that change your advice? Thanks for the reply.