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- partner capital account seems like Proseries is using book net income
partner capital account seems like Proseries is using book net income
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WI FISHY
Level 3
Saturday
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Form 1065 M-2 line 3 smart worksheet is taking M-1 line 9 (taxable income) then deducting nondeductible expenses to get "tax basis" net income (which is really book net income). Think 50% meals M-1. What am I missing?
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WI FISHY
Level 3
Sunday
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Tax basis capital account (as reported on k-1, part L )should be the entity Taxable income/(loss) for current year. ( Note taxable income already reflects the removal of nondeductible permanent items.) The PS auto calculation takes "taxable income/(loss)" and deducts the Schedule M of permanent items thus putting the income/(loss) back to a book basis. That is wrong. If you don't over ride and input taxable income/(loss) into the M-2 line 3 schedule, the capital account would be on a "book basis" not the "tax basis".
If using PS, follow the auto calculations and let me know how to get "taxable income/(loss)" reflected on the K1 for Capital Account Analysis (tax basis)....
