At [Content Removed]  we’ve reviewed this issue with ProConnect. Currently, ProConnect miscalculates a partner’s basis when nondeductible expenses and ordinary losses exceed the partner’s adjusted basis. According to IRS rules and the partner’s K-1 instructions, the correct calculation should:

1. Reduce the partner’s basis after distributions by the full amount of nondeductible expenses first,

2. Then subtract allowable losses, following Treasury Regulation §1.704-1(d)(2).

ProConnect’s current worksheet incorrectly splits the adjusted basis between nondeductible expenses and losses, which does not comply with IRS regulations. To ensure accurate reporting, we recommend updating the partner basis calculation to match the K-1 instructions and the IRS-compliant worksheet.

[Content Removed]  can assist in reconciling these calculations to ensure proper basis tracking for all partners.