The new partnership basis reporting uses their outside basis. If the partnership has never added or lost partners, then the book value of the capital account (inside basis) and the outside basis (cost basis) will be the same. However, if there have been partners added or lost, the book value of their capital accounts and their outside basis will be different, unless they sold or bought at book value. So under the new reporting, if there have been ownership changes, the outside basis will need to be provided by the partner, as the preparer will not know this amount. JEEZ LOUISE.

The IRS is not going to penalize mis-reporting of basis for 2020 returns. However, next year the penalties are slated to start being assessed.

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