capital account

[thomas1]

I am working on a partnership (LLC) tax return and want to be able to have the balance sheet (Schedule L)  automatically calculate the **BOOK** capital account (not tax).

Under the recent IRS rules, the capital account on Schedule M-2 as well as the capital account on the Schedule K-1's need to be on tax basis.

The Balance Sheet (Schedule L) capital accounts is picking up the Partner Capital accounts based on the M-2 capital accounts which are on tax basis.  I currently have to go to Screen 24 and override the Partner Capital Account to **BOOK** Partner Capital Account. 

I want to be able to have the balance sheet (Schedule L) Capital accounts (which is on book) to use the following method to calculate the Partner Capital Account which is basing everything from the Schedule L and from the  Schedule M-2.

_____________________________________________________________________________

Partners' Capital Account from Beginning of Year ( Form 1065 Schedule L, Line 21)

+ Schedule M-1 (Ln 1 Net income (loss) per books

+ Capital Contributions (Cash and Property)

+ Other Increases

- Distributions (Cash and Property)

- Other Decreases

= Partners' Capital Account from End of Year (Schedule L, Line 21)

The differences from the M-2 would be that you would be

1.using the Schedule Ln 25 beginning Capital Account **BOOK** instead of the M-2 Ln 1 Balance at beginning of year **TAX**

2.using the Schedule M-1 (Ln 1 Net income (loss) per books **BOOK** instead of the Schedule M-1 (Ln 9 Income (loss) (Analysis) of Net Income (Loss), Line 1) **TAX** 

[MHCPAS]

Lacerte is putting the balance sheet out of balance by using that tax income not the book income in the M2. Thus book retained earnings is off. They need  to use book income in the M2 and create a separate schedule for tax basis capital accounts and put on K-1.