Basis calc for ptner show s/e hlth as a decr in basis - ptship losses and ded. Quickfinder pg b-26 says that s/e hlth not incl in basis calc. how to correct .

[marsha]

partner basis calcs appear incorrect.  reductions on line 10 include s/e health.

[itonewbie · Accepted solution]

Both are acceptable.  By default, SEHI paid for partners is treated as a guaranteed payment and that's how it is handled in Lacerte.  I don't have Quickfinder, so can't point to what it says exactly but that is an optional tax treatment.  You will find details of both in Rev. Rul. 91-26.

The input for the alternative tax treatment would be different since SEHI would then not be deductible by the partnership as an ordinary and necessary expense but considered a distribution.  If you would like to take that position, you should remove the related entries that exist and:

1. Enter the total on Screen 28 as a cash distribution; and
2. Enter the respective amounts distributed for SEHI to each partner under Special Allocations on Screen 29.