How to enter partner's capital account analysis from k-1

[jbtaxprep]

How to enter K-1 part I information

[George4Tacks]

Find Basis in the listing across the top, between State & Local and At-Risk.

This may or may not be the same as on the K-1. Only the client will know (maybe even not even the client).

[jbtaxprep · Accepted solution]

Thanks.   I saw the basis, which is different than what it states on the K-1 as you mentioned.  This particular tax client was given a payout to sell her 8.33% investment and the payout shows in the Section I box L.  Interestingly enough the basis I show in Intuit from prior years of this K-1 is around $126+k and she had a payout of about $128+k, the current year K-1 shows a decrease in basis of $97+k as transfer of capital to the client.  I entered the decrease in basis as reported on the K-1 but don't see it flow through as income for her.  I know it should be reported as a sale of a Capital Asset, do I report this on schedule D with the basis in the investment as shown on the current K-1?  I don't do a lot of work with K-1's like this so am a little unsure how to proceed.

[sjrcpa]

Capital account hardly ever equals basis.

Does the K-1 show zero ending capital?

The 97K decrease is what was needed to bring the capital account down to zero.

Use your basis numbers, and use the actual sale price.

[jbtaxprep]

Thanks so much.  It makes sense.  The 97K zeroed out the basis on the k-1.  I will use that as the basis for the Schedule D and the actual payout she received as the proceeds.  Thanks for the help.

[sjrcpa]

Don't use the 97K.

Use the actual basis immediately before the sale.

[jbtaxprep]

Thanks.  Will do.