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The 2019 Partnership tax module automatically netted capital gains distributions against a LT capital loss carryforward from earlier years. The 2020 Partnership module did not do this automatically.

DGCPA711
Level 1

The 2019 Partnership tax module automatically netted capital gains distributions against a LT capital loss carryforward from earlier years.  The 2020 Partnership module did not do this automatically, I had to go into screen 9 (Beneficiary/Grantor Info) and force it.  Why?  Did something change requiring me to manually override what was automactically done the year before?  My global setting did not change from 2019 either, I checked that

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12 Replies 12
TylorValdez1
Employee
Employee

The post talks about partnership, yet you referenced beneficiaries. Are you working on a 1065 or a 1041?

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DGCPA711
Level 1

It is a 1041 trust return, not a partnership, sorry for the error.

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TylorValdez1
Employee
Employee

In 2020 most likely the global setting in K-1 distribution options for Incl Cap loss in CG Dist is set to none. Change that to losses to the extent of gains.

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DGCPA711
Level 1

The settings are the same in both 2019 & 2020 yet the module is handling the netting differently.

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TylorValdez1
Employee
Employee

What did you manually override on screen 9?

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DGCPA711
Level 1

I overrode "Include capital losses in capital gains distributed: 1 = carryovers only.

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DGCPA711
Level 1

Actually my facts are a little off.  In 2019 there was a LT capital loss from 2019 sales, not a LT capital loss carry forward from prior years.  Not sure if that makes a difference.

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TylorValdez1
Employee
Employee

That would be why. So for 2020 we needed to tell it with the override to reduce the amount of capital gains distributed by the amount of any capital loss carryovers entered.

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DGCPA711
Level 1

So if there was a 2020 LT capital loss instead of the carryover it would have netted automatically like 2019?

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TylorValdez1
Employee
Employee

I believe so. Also if or if not the Schedule B is generating could be a factor.

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DGCPA711
Level 1

Yes, I tested it and your explanation worked.  Current year LT capital losses did offset the CG Dist. without an override.  I'm all set, thank you.

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DGCPA711
Level 1

In 2020, if I don't override, capital gains distributions get K-1'd to the beneficiary.  In 2019, the capital gains distributions never get K-1'd to the beneficiary even if I put a "2" = none as an override on screen 9.  In 2019 the program automatically nets the CG dist. against the cap. losses, but not in 2020.

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