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- UPE and basis adj
UPE and basis adj
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bcarrillo
Level 1
07-03-2023
07:45 PM
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Current year UPE exceeds a partner's basis resulting in basis limited disallowed partner expenses. Is an adjustment to increase outside basis "Additional amounts invested in activity in current year" on the 1040 (K-1 basis input section) appropriate here? It seems such can be treated as a deemed capital contribution; however, guidance to support treatment is not clear.
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TaxGuyBill
Level 15
07-04-2023
05:12 PM
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I'm not sure of the answer, but wouldn't it just be a suspended expense/loss, just like if the K-1 had a loss that was limited due to Basis?
I understand your thought about a deemed capital contribution. I haven't seen anything that allows an option/election to treat UPE as a capital contribution, but maybe I just haven't heard of it.
bcarrillo
Level 1
07-14-2023
01:57 PM
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Thanks for the feedback.
