I received a K-1 and a 1099 for the same payout on my investment.

If you received a payout because an Artwork was sold and received funds into your Masterworks Trading Wallet, then you will also receive a 1099 in addition to a K-1 for the same payout.

Since you must report both the 1099 and K-1 on your tax return, you will need to adjust your 1099 first in order to not double count your income on your tax return.

1. First, include the K-1 income on your tax return as it is reported on the K-1.
   1. If using TurboTax see A Step-by-Step guide to reporting Income from your Masterworks K-1 when using Turbotax
2. Then, add your 1099 to your tax return but adjust the cost basis. To adjust the cost basis, use the cost basis as reported on the 1099 and increase it by the current year net income amount on your K-1.
3. Finally, calculate a new 1099 gain (or loss) using the adjusted cost basis. Report this on your tax return instead of the originally calculated 1099 gain (or loss) amount. 
   See example below.

EXAMPLE