jbmiller03
Level 1

ProSeries Software Question on the K1 conversion to tax basis.  

I kept the previous K1s on GAAP basis.  For 2020, I have filled out the Schedule L and Schedule M-1 with GAAP basis information as I have done in the past.  If I then go to the K-1 worksheet to adjust the capital account to tax basis, I receive an error on the Schedule L and M-2.  ProSeries is also putting book income instead of tax income in Section L of the K1.  Is there something in the software to fix this issue or do I have to fill out the Schedule L with tax basis information.

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JRC
Level 8

I'm thinking we need to Overwrite some entries to make it balance or not.

Still how would we show the Balance sheet Liabilities if they should be allocated to Partner's Tax Basis?

 

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JRC
Level 8
 
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CGS
Level 2

On the "Schedule K-1 Worksheet", there is a line for each Partner to make an adjustment to Tax Basis. However, these adjustments will then throw off the Beginning Schedule L/BalSheet.  I guess you can then override the Schedule L.

I doubt ProSeries will have a fix for this anything soon/ever.

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nancy2
Level 4

I simply changed the PY capital accounts number on Sch L to the amount reported on the 2019 Sch L.  That immediately flowed through to everything else and now I am in balance.  Someone indicated that Sch M-2 was supposed to be tax basis.  I can't figure out how to do that and have things balance out.  If anyone has any thoughts on that I'd like to hear them.  Otherwise, Sch M-2 will be in agreement with the books.  The individual partners capital accounts on the K-1s will be their tax basis.  

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msickles
Level 1

I determined what Beginning Basis was needed for each Partner on the Partner's Basis Statement to arrive at the Ending Basis I needed.  I entered this amount on the Schedule K-1 worksheet in the Basis column on the Beg of year (tax basis) line.  But this does not affect the Schedule K-1 Capital. 

Go to Schedule M-2 Analysis of Partners' Capital Accounts. On Row 4 put an 'A' in the 'Special Allocation' column (third column - column 1 is description and column 2 is amount) which integrates with the Schedule K-1 Worksheets 'Special Allocations By Amount' column.  Enter a description.  My total was zero.  Go back to Schedule K-1 Worksheets 'Special Allocation By Amount' column and enter the amounts on line 'A' here that you need to make your Schedule K-1 Section L Partners capital account analysis (tax basis capital) equal the amount you need.  The number you enter on the Schedule K-1 Worksheet appears on the Schedule K-1 Other increase (decrease) (attach explanation) line.    

 

  

 

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