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

What is Section 704 (c) information - line 20 - AA

Labels (1)
0 Cheers
2 Comments 2
Level 15

Is it also in Box N of the K-1?

Did your client contribute appreciated property to the partnership?

Level 3

I have a situation where a new partnership was formed in 2020.  Two partners in the partnership contributed each 2% in cash, but received  an additional 2% share each at formation for "services rendered" (total share  of 4% + 4% = 8%)  .  This diluted the other 3 partners who contributed only cash at formation.  The other 3 partners who only contributed cash contributed 96% of the cash, but only received a 92% share of the partnership interests.

QUESTION:  Is the above scenario one that capital account revaluations?  Would it require reporting of Partner’s Share of Net Unrecognized Section 704(c) Gain or (Loss) on the 2020 1065 K-1?

0 Cheers