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See what's trending for the November 15th deadline (Form 990) and resources for the upcoming tax season. View Lacerte Hot Topics.
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- Re: Sec 754 Adjustment - California K-1 Issue
Sec 754 Adjustment - California K-1 Issue
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lmasseycpa
Level 2
01-07-2021
06:12 PM
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I've got a partnership with a Sec 754 Basis adjustment, I have it handled for the Federal module (using the Deprec and Spec Allocations Screens), but for California, I'm getting a detail on the K-1 showing:
"Sec 754 Adjustment in net expenses = $400" <<<shows on both partner K-1s
"Sec 754 Deprec Adj = ($800") <<<shows only on the partner with the 754 adj
The $800 is the correct amount that I want to allocate to this partner, and this seems to be coming from the CA special allocation screen...
What is causing the first entry of $400 for both partners...which is INCORRECT?
Thanks!
Larry Massey, CPA
Folsom, CA
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lmasseycpa
Level 2
01-07-2021
06:27 PM
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Had to walk through this again slowly...short version, as I suspected, is that Lacerte had this right all along...the adjustments shown on the K-1 detail are correct...the program is eliminating the Sec 754 depreciation that was deducted on the Form 8825, and then adding it back for the partner with the 754 adj allocated...they have it right...it just looks a little weird...all of the numbers fit!
