K-1 (form 1065) from ETF and broker 1099-B entries are not matching (2024)

• TurboTax Premier Online

‎April 9, 20217:42 PM

Partnerships don't pay their own taxes. Instead, they put all the taxable items onto K-1s and send those out to their partners. Each partner that reports the information on the K-1 and pays the appropriate taxes.

For every item of income the partnership reports, you're basis in the partnership goes up. For every deduction/loss, it goes down. Because your broker doesn't see the K-1, they can't adjust what they report as your basis on the 1099-B. That's why they don't report the cost basis to the IRS.

In TT, when you enter the K-1, TT takes care of moving things to the right boxes. However, you have to refigure your cost basis and make sure its reported properly on your 1099-B. The k-1 may include information on how to do that. Or this thread, which has many comments getting into the complexities of handling PTPs, may help:

https://ttlc.intuit.com/community/investments-and-rental-properties/discussion/how-i-report-the-sale...

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Thanks for the reply.

I am little confuse to adjust the numbers in 1099 form.

Below are the examples of numbers in 1099b:

total cost : $100

total proceeds: $70

wash sale $10

Example of k-1 form 1065 :

capital contributed during the year : $90

current year net income : $50

withdrawal and distribution: ($140)

box 1 ordinary business income 0

box 8 net short term capital gain $15

box 11 other income C $35

i have entered the 1099 and k-1 entered as it in the TT.

Please let me know by using the above example what should I adjust in the 1099 entries?

I am understanding that there is no adjustments required in K-1, please confirm it.

@tk333 It may be a problem with your example, but if you bought the shares for $100 (total cost from your 1099-B), then the K-1 should show $100 for the 'capital contributed during year', not $90. If those numbers are truly different, you have to talk to the K-1 preparer and fix it. I'll assume in the below that $100 is the right number, and that your K-1 will be fixed.

The K-1 shows 2 items of income (box 8 and 11C) totaling $50. Those items are going to show up on your return. There's nothing that you need to do to adjust the K-1 entries, but since its always better to be careful you should make sure you see where those 2 items are winding up on your return. You can generally trace all these numbers through 'Forms' mode.

Because the K-1 raises your basis by $50, you'd adjust your 1099-B to have a total cost of $150 (not $100). Ignoring the wash sale, that gives a Cap Loss of $80 ($70-$150).

Note that, based on your example, the loss from 1/3rd of your shares is affected by the wash sale. So you have to adjust the wash amount of to $26.67, and add the $26.67 to whatever replacement shares were affected. When you eventually sell those shares neither your broker or the Partnership is going to have that adjustment, so you have to maintain your own records.

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Use any advice accordingly!

Thanks for your reply.

I think my earlier numbers are confusing due to wash sales.

I have purchased all shares and sold all shares in same year due to it wash sale will not affect , in the form 1099 wash sale number has been adjusted,.

I have changed the below numbers.

Below are the examples of numbers in 1099b:

total cost : $100

total proceeds: $70

wash sale $10

Total Loss : $30

Example of k-1 form 1065 :

capital contributed during the year : $100

current year net income : $50

withdrawal and distribution: ($150)

box 1 ordinary business income 0

box 8 net short term capital gain $15

box 11 other income C $35

I have total loss of $30 according to form 1099 but K-1 form has added the $50 in my income ( Total of Box 8 and and Box11).

Should I increase the Cost basis to $150 instead of $100 as per above example ?

Is there any other change also required ?

@tk333 Based on the example, and ignoring the wash sale, all that would change is the basis you report. From 100 to 150.

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**Note also, I'm not a Tax Preparer/CPA. Just a volunteer, seasoned, TurboTax user.
Use any advice accordingly!

Thanks for the reply.

I will change the cost basis from 100 to 150.