Step up in basis by partner

[kim4]

I am an E.A. in Wisconsin and I do a partnership return -apartment rental income, 3 partners.  The apartment project was built in 1992 so depreciation is basically gone.  One partner died the end of 2021, his beneficiary qualified for step up in basis, second partner died early 2022, again step up in basis issue.  I use Lacerte and if I check the 754 election it wants to step up the basis for the whole partnership and only 2 partners shares should get the step up in basis.  I have developed a small spreadsheet to determine the proper depreciation by partner and have filed paper returns for the last 3 years because I can't efile because I can't get Lacerte to do the step up by partner.  I have spent a ton of time on the phone with Lacerte support over these last 3 years on this issue without a solution.  Wisconsin  requires all business returns to be efiled and you have to apply for permission to file a paper return.  The first 2 years they accepted the paper returns but this this year they are denying our request to file paper.  They want the return efiled.  I filed an extension to gain time to solve this problem. Does anyone know of a good tax program that can handle this situation or have any other suggestions?  Any help would be greatly appreciated.

Kim K

Enrolled Agent

email

[PhoebeRoberts]

I am 99% sure that Lacerte will do this with a combination of special allocations and coding the stepped-up assets to the Form 1065, Schedule K. But I don't have a file I can pull and send you screenshots, and I don't have time to do a dummy return well enough to get it 100% right. Tag me after 4/15 and I'll do up a dummy return and send you screenshots!

[kim4]

Thanks for the response.  It is encouraging to hear that there may be a way to do it in Lacerte as their "experts" in tech support have not been able to solve it.