Level 4

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Why wrong capital amount?

Forum|Forum|6 years ago
December 7, 2019
4 replies
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In the ProConnect Tax Online, in the Partnership Return, each partner's capital account balance should be the same amount as the end-year capital account balance of the previous year's ending balance, but, while the total capital account of the beginning balance matches to the last year's capital balance, each partner's capital balance as of the beginning balance shown in each partner's K-1 was wrongly calculated by the Program, showing a completely different amount. The per-partner's capital percentages are correct and yet, it looks as if the program automatically allocate that total amount based on the ENDING percentage of the CURRENT year, so that the beginning capital amount of each partner completely differs from the last year's capital balance for each partner.

The accurate amounts are entered in the basis worksheets, but none of these entries are not reflected in the capital account calculation. And there is no place where I could enter the accurate capital balance for both beginning and ending balances for each partner to reflect the accurate Beginning Capital amount for each partner.

The critical problem is that the program automatically calculate each partner's BEGINNING capital amount based on the current year's ENDING percentage.

How to fix this critical problem, when there is place to manually enter each partner's beginning capital amount?

ProConnect Tax Online

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Best answer by George4Tacks

The program does not compute beginning partner beginning capital account balance. Last year it would have computed an ending balance and possibly it brought forward an incorrect amount. Go into each partner account and enter the correct beginning balance.

Across the top are Profile, Input Return Special Allocations .... Select Special Allocations and you can enter the beginning balance for each partner. That is also where you would make specific allocations of various items of income and expense PER PARTNER, being very careful that they properly total out to the amount computed by the program.

George4TacksAnswer

Level 15

The program does not compute beginning partner beginning capital account balance. Last year it would have computed an ending balance and possibly it brought forward an incorrect amount. Go into each partner account and enter the correct beginning balance.

Across the top are Profile, Input Return Special Allocations .... Select Special Allocations and you can enter the beginning balance for each partner. That is also where you would make specific allocations of various items of income and expense PER PARTNER, being very careful that they properly total out to the amount computed by the program.

Answers are easy. Questions are hard!

S

SunnySpringAuthor

Level 4

Thank you for your comment, but it doesn't help at all.  There is no place to enter each partner's beginning capital balance.  Only per-partner's entry place is the basis worksheet.  And even though I entered the accurate beginning balance and ending balance including withdrawal in the basis worksheet (because of per-partner entry), none of the amounts entered there is not reflected in the K-1 Capital Account.
There is no place where you can enter each partner's beginning capital balance, which was supposed to be needed if the last year's return was rolled over or converted to 2018 return properly.
The "total" of partner's beginning capital is accurate, but not accurate in each partner's beginning capital balance.  And all the percentages are supposed to be carried from the last year's return, but the program automatically calculate the beginning capital balance of each partner based on the ENDING percentage of the current year.

Even if the Special Allocations can be used, they are applied to the ENDING capital balance, not the beginning balance.

P/L percentages are 50/50, so it is ok, no problem, but, the capital account of each partner has to be different and has to be coming from the last year's ending balance, which was not done in this program.  And there is no place to overwrite each partner's capital account.

I really think that this program is only for individuals, not for pass-through entities, because the program can't do per-partner's capital calculations.

itonewbie

Level 15

Think this is what you'd like to do. There is a $1 difference in allocation for non-deductible expenses because you rounded down the allocation but PTO did not. If you're looking for a different set of output, what exactly should the results be?

---------------------------------------------------------------------------------Still an AllStar

itonewbie

Level 15

@hhommo6360 Did this solve your problem?

---------------------------------------------------------------------------------Still an AllStar

George4Tacks

Level 15

It sounds like you may need to contact support. Here are two images to help

Enter a beginning capital amount (I used $11,000) I have two partners that get a 30/70 split.
Click the Special Allocations (starred in the 1st image) and enter beginning capital for the partners so that it totals $11,000 (from step 1) in any allocation you want. In my case I would have gotten 3,300 for one partner and 7,700 for the other, but I have entered a different total

Answers are easy. Questions are hard!

S

SunnySpringAuthor

Level 4

Thank you for the help.  Actually using Special Allocation screen was right "answer" to this problem.
Still I would think that this solution is only for the users, who should take time to do this in order to get the accurate amounts.  I still think that the program provides the right boxes in the Input Screen, not Special Allocation, and that the program should NOT calculate this way, beginning capital amount per partner based on the Ending Percentage of this year, which makes everything wrong and which does not make sense at all.
Nonetheless, I thank you all for the helps.  Thank you very much.

itonewbie

Level 15

"The "total" of partner's beginning capital is accurate, but not accurate in each partner's beginning capital balance. And all the percentages are supposed to be carried from the last year's return, but the program automatically calculate the beginning capital balance of each partner based on the ENDING percentage of the current year."

Since the total of partners' beginning capital is correct and only the allocation is incorrect, perhaps you could try the following under Partner Information > Partner Percentages > BEGINNING (XX.XXXXXX)

OWNERSHIP OF CAPITAL: Enter the correct allocation for each parnter (e.g. Partner A = 20%, Partner B = 10%, Partner C = 70%)

This should get the correct amounts of capital flowing to the respective K-1's for Beginning capital account.

---------------------------------------------------------------------------------Still an AllStar

S

SunnySpringAuthor

Level 4

Thank you for the suggestion, but I did that exactly, i.e. entering a Partner Percentage to the screen Partner Percentages, which could get the correct beginning capital balance (but which was not the correct percentage of that partner's beginning percentage). But this attempt did not work, because the program calculates the beginning capital balance by using the current year's ENDING percentage. No matter whatever and however I tried and attempted, the K-1's Beginning Capital was calculated by the program's using Ending Percentage.

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