I sold all of my shares in EPD in 2016 and received their K-1 form. I also received the 1099-B from my broker. Now Sch D seems to show the sale twice. How to fix?

Sheesh!  In this situation, edit your list of 1099-B transactions, and DELETE duplicates that are already reported via your K-1 entries.

1.   NOTE for current and future returns:  To enter capital gains/losses and ordinary recapture on the sale of partnership interests as reported on brokerage statements and K-1’s, follow the following instructions: [NOTE: This approach avoids entering totals received from the broker and then trying to figure out where basis adjustments etc. reported in the K-1 package go. Make each 1099-B broker statement an EXHIBIT to attach to the return which reflects the adjusted totals and enter the totals on the appropriate TurboTax input schedule as indicated below. [Use the FORMS approach to enter the data outlined below NOT the EasyStep – which I’ve never used.]

2.   FIRST STEP:  Enter the K-1 data on the K-1 entry sheet.   {Assuming ALL units are sold} - on the “Final/Amended” section at the end of Part II, click on the:

a.   Final K-1 box

b.   Partner sold or otherwise disposed of entire interest box….

c.   Click on the QuickZoom button –  then to Part II Disposition of Partnership Interest

                                              i.      Check boxes on 1a and 1a(1)

                                            ii.     Enter dates etc on Line 2,3&4.

                                          iii.     Enter “0”s on Selling Price and Basis, line 5 & 7, at the bottom of the schedule. Do not enter the actual data here.

3.   SECOND STEP: Go to the schedules in each K-1 package from partnerships sold which show the adjustments to basis required, and the ordinary income portion etc.

a.   Determine the number of units sold for Long-term and Short-term transactions respectively from the Vanguard statements of sales. Draw a line to separate the two categories. Add and note total L/T and S/T adjustments.

4.   THIRD STEP:  Make a copy of each Vanguard 1099-B schedule of “Proceeds from Broker and Barter Exchange Transactions” to become EXHIBITs to reflect the adjustments. Enter each adjustment for each partnership at the bottom of the schedule for the basis/gain/loss info shown in the 1099-B. The EXHIBITs will be attached to the return. There will generally be four (4) 1099-B’s to reflect:

a.   L/T – Basis reported to IRS [Box 3] transactions

b.   L/T – Noncovered securities - basis not reported to the IRS [Box 5]

c.   S/T – Basis reported to IRS [Box 3] transactions

d.   S/T – Noncovered securities - basis not reported to the IRS [Box 5]

                                              i.     The name for each one should contain the relevant description, e.g. “Taxpayer Name L/T Basis Reported…” etc which will make it easier to find each one in the left margin menu in FORMS mode.

5.   FINAL STEP:  The totals after adding/(subtracting) the adjustments determined on the above 4 schedules will be entered on two different TurboTax Schedules:

a.   Use a separate CAPITAL GAIN (LOSS) TRANSACTION WORKSHEET for each of the categories listed above – creating 4 different transaction statements.

                                              i.      L/T – Basis reported to IRS [Box 3] transactions

                                            ii.     L/T – Noncovered securities not reported to the IRS [Box 5]

                                          iii.     S/T – Basis reported to IRS [Box 3] transactions

                                            iv.     S/T – Noncovered securities not reported to the IRS [Box 5]

1.   Look at the 2016 1040 or 1041 schedules to see how they were done.

                                            v.     Complete the relevant info in Part I.

                                            vi.     On Part II,

1.   Line 4 Company Name – enter SEE EXHIBIT “x”. 

2.   Lines 5c and d – VANGUARD and a/c number

                                          vii.     Part III – enter relevant info on lines 4 and 5

                                        viii.     Part IV – check boxes on lines 1, 2 and 5b

                                          ix.     Part X – this is where the key info is entered for sales price, cost etc. on lines 4 and 5.  On line 7 “Total adjustment to gain (loss)” enter the Ordinary Gain as a negative number. [This ordinary piece will be entered as a positive amount on Form 4797 in the next step]. The adjusted gain should agree with the adjusted gain determined on the EXHIBIT.

1.   Note on line 9 the codes can be determined by putting your cursor on the box and click on the HELP CENTER in upper right. Then click on “Form 8949 Adjustment Codes” in the popup box. Generally it should be BMO.

b.   On Form 4797 Sales of Business Property input form, pg1, enter L/T and S/T ordinary income adjustment amounts on two separate lines:

                                              i.     Column (a) Description – enter the name of the EXHIBIT “x” -ORDINARY.

                                            ii.     Column (d) Sales Price – enter the ordinary amount. [no other info is required – only sales price.] These amounts will show up on the two parts of the Form 4797 which you select in the next steps.

                                          iii.     Column (h) indicates whether its short-term [goes in Part I] or long-term [goes in Part II].

                                            iv.     Column (i) – your selection is for Taxpayer or Spouse ownership.

c.   This should complete the process. Review Schedule D and Form 4797 to see that the L/T, S/T capital gains on D and the L/T, S/T ordinary income totals are properly reflected and agree with the totals from the EXHIBITs above.  They should if you followed the details above.  Good luck!!