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How to report this, without double reporting?

Reduce amount from brokerage 1099-DIV....seems wrong.

TIA,
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Ask for a corrected 1099 DIV.
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First, once again make sure that the dividend total on the 1099 page includes the same amount as the partnership K-1, and that you're not looking at the "Other information" part of the statement, where they might be including the partnership distributions. And then yes, ask for a corrected 1099-DIV.

Bill
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I think the previous responses are jumping the gun. They are making some assumptions which could be wrong.

First, what makes you think there is a problem with duplication? What do you see that has been duplicated?

Second, let’s get some more info. Who issued the 1099? Who issued the K-1?

If the 1099 came from a broker and the K-1 is from a publicly traded partnership, the reporting is rarely wrong. Both of these entities know how to report things properly, so the issue is likely to be in your understanding of the reporting.

However, if the K-1 is from something like a family partnership, there are a whole host of other potential problems.

—Peter
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Thanks for the reply.
The Schedule K-1 is from Brookfield Property Partners (BPY).  This information is provided on their web site:


  Generally, you may receive Form 1099-INT and/or Form 1099-DIV from your broker in respect of units
  of our partnership. Form 1099-INT is used to report interest income and Form 1099-DIV is used to 
  report dividend income. Schedule K-1 (prepared by us) is used to report income and expenses 
  earned/incurred by a partnership and also provides additional information such as the amount of 
  distributions paid to a unitholder. Historically, our income for U.S. tax purposes has included 
  interest and dividends earned from subsidiaries of the partnership. Even though the interest and 
  dividend income is reported on Schedule K-1 that we issue, brokers are nonetheless required to also 
  report the interest and dividend income on Forms 1099-INT and 1099-DIV. The Forms 1099-INT and 
  1099-DIV prepared by your broker will include information on any foreign withholding taxes that 
  they withheld so that you may claim a credit and/or deduction on your tax return, if eligible. 
  Because the withholding tax process is administered by the brokerage community rather than by us, 
  taxes withheld are only reported on Forms 1099-INT and 1099-DIV (and not on Schedule K-1). Do 
  not report the 1099-DIV and 1099-INT amounts in your tax return if those amounts are already 
  included in your tax return from the provided Schedule K-1 you received from the partnership as 
  this would be duplicative.

Based on the above and other sites e.g. https://finance.zacks.com/k1-forms-costbasis-calculations-11... 
I believe this investment would result in following (each year):

1. Adjust short term capital gains by current year net income (loss) - (Sched K-1 Section L)
2. Adjust cost basis on the investment using this formula:
   a. Subtract distributions 
   b. Add current year net income (loss)

Line 19A of Schedule K-1 value matches sum of dividends received on BPY.
 
As previously noted, my brokerage (IB) includes the distributions in the 1099-DIV.  
I believe this is incorrect?  
If so, I would think I could run into problems if I simply reduce the dividends I report from my IB account.  
Would I be crazy to expect IB to issue a corrected 1099-DIV?
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This part makes no sense to me.

Historically, our income for U.S. tax purposes has included interest and dividends earned from subsidiaries of the partnership. Even though the interest and dividend income is reported on Schedule K-1 that we issue, brokers are nonetheless required to also report the interest and dividend income on Forms 1099-INT and 1099-DIV.

For this to happen, the dividend on stock that was owned by the partnership would have to be paid to you instead of the partnership. Why would that happen? Why wouldn't the dividend be paid to the partnership, where it will flow through normal reporting to the K-1?

I suppose the first thing to do would be to determine if this applies to you. Are there amounts included as dividends or interest on the 1099 from IB that you did not receive?

Line 19A of Schedule K-1 value matches sum of dividends received on BPY.

This is a pet peeve of mine. You never receive dividends from a partnership. You receive distributions. Only corporations pay a dividend. A partnership is not a corporation, therefore it cannot pay dividends. I understand when investors make the mistake. They are generally not professionals in the investment field, so may not know the difference. I cannot stand when investment advisors or investment writers make that mistake. These ARE professionals and should know the difference.

Getting back to the comment (and making the correction in terminology), it is good that the K-1 figure matches the distributions you received. Now to do the same checking of the dividends you received.

--Peter
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Are there amounts included as dividends or interest on the 1099 from IB that you did not receive?

All amounts from IB are in 1099-DIV. (And show up in various reports as Dividends from BPY :( )

-in4ever
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All amounts from IB are in 1099-DIV. (And show up in various reports as Dividends from BPY :( )

OK. Then I agree with the previous posters. The IB 1099 is wrong and they should correct it.

I find the situation unusual. Usually brokers know that distributions from a partnership are not dividends and do not include them on the 1099-DIV they issue. So there may be something more going on here that would take more time than I have to figure out.

--Peter
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Peter,

Thanks for all the insights. I agree, I suspect there is something I'm unaware of. I've opened a ticket with the brokerage and will post the result, in case this can be helpful for others.

-in4ever
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The Schedule K-1 is from Brookfield Property Partners (BPY).

For what it's worth, I own some BPY in a taxable account at E*Trade. The consolidated 1099 from E*Trade only mentions BPY in the DETAILS OF 2020 NON-1099 DISTRIBUTIONS section. That section matches exactly the distributions I received from BPY, which aren't included in the 1099-DIV or 1099-INT totals.

Of course it's conceivable that will be changed in a subsequent corrected 1099, but it's survived one correction so far, so it seems E*Trade at least agrees with ptheland and others here and not IB.

Brian
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Brian,

For what it's worth, I own some BPY in a taxable account at E*Trade. The consolidated 1099 from E*Trade only mentions BPY in the DETAILS OF 2020 NON-1099 DISTRIBUTIONS section. That section matches exactly the distributions I received from BPY, which aren't included in the 1099-DIV or 1099-INT totals.

Thanks for the reply.
I got a copy of my daughter's 1099 from Schwab, as she also had some units. Her 1099 seemed to match your experience, reporting the amount on line 3 Nondividend Distributions.

The Summary section details the gyrations the accounting of the distributions.
It has amounts paid in 2020 as non-qualified dividends, matching the BPY distributions,
then offsetting adjustments in 2021, equaling the 2020 amounts, netting to zero.
Lastly, there is a section for Nondividend Distributions (Return of Capital), containing the distribution amount.

I suspect it is I who will get the corrected 1099....at least I hope so :)

Thanks all,

-in4ever
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Just curious if you were able to resolve this with the broker. I have the exact same issue for the exact same security with the exact same broker. Opened a ticket, followed up with a query, but have heard crickets. If a corrected 1099 is not issued, can I self-correct it and provide an explanation on my return?
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After additional requests, I finally got the following response:
In some instances, broker reporting requirements may differ from investor requirements. Should the issuer or some other agency provide you with additional information for consideration, please feel free to forward it for review by your qualified tax professional for your tax filing.

Appears this brokerage considers it up to me and my tax professional to reconcile the 1099 and K-1.

Odd because other brokerages don't have this issue.

Curious if the OP got a more helpful response.
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