2020 1065 SCH L: How do I report GAAP balance sheet but Tax Basis K-1's for members?

Forum|Forum|5 years ago
April 19, 2021
1 reply
18 views

New Tax Law requires Member's K-1s to use Tax Basis. Instructions to 1065 says the Sch L balance sheet is supposed to be on GAAP or BOOK basis.
How do I get ProSeries to let me have the sum of the K-1s capital accounts "not" equal Sch L and M-1 ending capital account balance?

ProSeries Professional

This topic has been closed for replies.

Best answer by KDW

Thanks, but the problem isn't with the K-1 Tax Basis.

I see now that M-2, Line 3 "Net Income per Books," per the instructions, should be overriden and replaced with Taxable Income. I assume we are supposed to override the BOY capital such that it is Tax Basis. Then the M-2 will match the K-1s. From speaking with another CPA for a Big 4 Firm, he says M-2 doesn't need to match SCH L and no reconciliation is needed for 2020.

JRC

Level 7

Use the "Sch K-1 Wks" entry form for each Partner and Enter an Adjustment there in the Field "Adjust to tax basis" (######.00).

K

KDWAuthorAnswer

Level 2

Thanks, but the problem isn't with the K-1 Tax Basis.

I see now that M-2, Line 3 "Net Income per Books," per the instructions, should be overriden and replaced with Taxable Income. I assume we are supposed to override the BOY capital such that it is Tax Basis. Then the M-2 will match the K-1s. From speaking with another CPA for a Big 4 Firm, he says M-2 doesn't need to match SCH L and no reconciliation is needed for 2020.

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