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- Partnership Section 754 amortization and 743(b) adjustment
Partnership Section 754 amortization and 743(b) adjustment
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inquiringminds
Level 1
02-11-2022
07:52 PM
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Partnership books are maintained on tax basis and section 754 amortization is recorded on books for 10,000 bringing the net income to 20,000. The 754 amortization of 10,000 flows to schedule K line 13D. We report the 10,000 as a 743(b) positive adjustment on schedule K line 11 H to bring the net income on line 1 of Analysis of Net Income to 30,000.
Do we add back the 10,000 to bring the book income to taxable Income of 30,000?
Our M-2 smart worksheet shows 30,000 less 743(b) adjustment bringing the balance to 20,000 but that makes the M-2 out of balance by the 10,000.
We know the 743(b) adjustment should be reported on line 20 but we are not sure what we are doing wrong.
does it get reported on line 20? it doesn't get reported ?
