Welcome back! Ask questions, get answers, and join our large community of tax professionals.
cancel
Showing results for 
Search instead for 
Did you mean: 

Partnership capital accounts tax basis

Level 2

Is anyone going to disclose the beginning capital account method with the K-1's?

I received 3 K-1's today for a client from another firm and each had a supplemental statement 

 BEGINNING CAPITAL ACCOUNT METHOD USED - TAX BASIS

Can this be generated in Lacerte automatically of would use  Screen 31 Supp info all partners?

Or not at all?

Thanks

Labels (1)
0 Cheers
7 Replies 7
Level 15

Yes I'm disclosing. It is required.


ex-AllStar
Level 2
 
0 Cheers
Level 2

Are you using supplemental info for input or is there something in Lacerte to check t generate it

Thanks

0 Cheers
Level 2

I could have missed something but is there a way to get Lacerte to generate a footnote.

On a K-1 I received, Schedule L had SEE STATEMENT  and the statement said Beginning Capital Account Method Used - Tax Basis

I can generate the footnote with Supp info all partners but was wondering how you were disclosing

Thank you

0 Cheers
Level 1

See detail input 28 - Schedule M-2.  Choose method to compute beginning capital.

Level 2

That only applies if your beginning capital was not on the tax basis. At the top of the screen it says 

"If tax basis method was not previously used" and if you enter tax basis the footnote information is not correct

Firms using CCH ProSeries get an auto generated footnote that says:

Beginning Capital Account Method Used - Tax Basis and also s note that says "See Statement" in the body of Schedule L, Partners Capital Account Analysis

I was hoping to see something similar in our software without having to generate the disclosure using Screen 31

0 Cheers
Level 2

SAF:

Lacerte can print a note on page two of the K-1 noting that Box L is now tax capital basis as the regulations require.

The current problem is; if Schedule L and Schedule M-2 remain on some other basis such as GAAP, Sec 704(b) book Lacerte will not allow different amounts in Box L, K-1.

IRS instructions require beginning capital to be "tax capital basis" as we know, however any change to Box l will force a change to Schedule L and M-2. This is a flaw in the program, Intuit engineering refuses to address this until enough users revolt. 

To comply with the new regulation, you have to force an adjustment in the balance sheet and M-2

0 Cheers