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- Form 1065 Schedule M-2
Form 1065 Schedule M-2
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vioricam
Level 1
4 weeks ago
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Software creates automatically an INCREASE to the capital account for the same amount entered on the screen 22.1 Section 743(b) negative income adjustment. This is then allocated to each partner capital account in the same amounts as specially allocated on the screen 29.
The end result is that the deduction is presented properly in the box 13 code V on the schedule K-1 but it is cancelled by an increase in the capital account.
Any reason for this to happen? Is it a IRS requirement for capital account to be presented without Sec. 743 (b) adjustment? Or is it a turn around which needs to be operated in the system to remove the positive capital adjustment?