I received a K-1 from an ETF, as well as an insert with instructions on what to do with the numbers on it. This ETF was my only holding whose basis was not reported to the IRS.
The "Other income (loss)" field is equal to the difference between "Capital contributed during the year" and "Withdrawals & distributions" plus "Other deductions" minus "interest income". For the purposes of this example, let's call "Other income (loss)" $1000. The ETF paid no dividends and had no distributions.
The insert instructs me to use this in Form 6781, which then tells me to ascribe $400 of this to short term gains on "Schedule D or Form 8949", and $600 to long term gains on "Schedule D or Form 8949".
In the 1099 substitute they sent, my brokerage told me that since they have not reported the basis for my trades in this ETF to the IRS, I should use Form 8949... however their worksheet for form 8949 shows my overall gains from selling this ETF to be $900 (rather than $1000 - the difference appears to arise from proceeds not equaling K-1's capital distributed... cost and capital contributed match, modulo brokerage fee).
Should I apportion the proceeds of each sale 40% ST, 60% LT on 8949? If so, should I use my brokerage's figures or the ETF's? And then if I do that, should it be included on Schedule D lines 2 and 9 rather than 4 and 11? And do I use the $900 figure or the $1000?
What I actually did was to ignore 8949 and instead use lines 4 and 11 of Schedule D, since I could not figure out how (or whether) to prorate the proceeds from each sale of the ETF. If this was an incorrect decision, how bad of a misstep was it (I'd still be paying the same taxes, AFAICT)?