Hi!

Was there a new requirement that all partners need to have a Basis statement before filing their tax returns? Is it just for Partnerships?

Is there similar tax legislation for S-Corps?

There was a new law enactment for Partnerships to check the Capital Accounts when it's negative and how it may affect the partners starting in 2019/2020.

Is it Notice 2019-66? Reporting of Positive Tax Basis Capital Accounts not Required Until 2020 Partnership Tax Years

www.irs.gov/pub/irs-drop/n-19-66.pdf

Recall in some tax webinars that the speakers mentioned something about Losses reported on K-1s and that the shareholder/partner 'should' have a basis statement to clarify whether or not they are allowed that loss. But that clarification has been there for Years! Can't deduct losses without basis.

How does one 'correct' for Negative capital account? Esp. if it's a new client who can't find old partnership returns? And the old accounting/tax firms won't cooperative??

How does one 'correct' basis when Capital account is Negative but Basis worksheet, if available, shows  Possible balance? Does Not seem correct?

Negative Capital balances are shown on Form 1065 balance sheet from prior year.

Best action seems to give Zero for Beg Balance and start fresh when you take over for basis calculation.

The govt tax authorities can question the taxpayers and prior accounting/tax firms on their calculation on capital and partners' basis considering their lack of cooperation.

Thanks for your assistance!