754 Depr as an "Other Deduction" on UBI Statement A

Forum|Forum|6 years ago
February 15, 2020
8 replies
59 views

ProSeries is capable of properly handling the deduction (for general income tax purposes) of the specially allocated depreciation deduction attributable to partners who have a Section 754 basis step-up. However, that deduction should also be showing on the Statement A, under "other deductions" for the UBI computations associated with Sec 199A, but the "other deductions" field is blank. Furthermore, the unadjusted basis should also be accounted for and although it appears to be handled at the bottom of the asset entry worksheet, the basis nevertheless does not transfer into the unadjusted basis calculations. Is Intuit working on fixing this? Has anybody developed a reasonable work-around? Obviously, we could force-fit and override the numbers, but a professional product shouldn't need such an approach.

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C

CGS

Level 3

I have had to override...

I use spreadsheets to make it happen & then force it. The problem is also enhanced, in the fact that the 199A worksheet does not allow for Special Allocations to the effected Partners to the 754 Deduction.

I have made a suggestion to Proseries about the lack of Special Allocation feature for the 199A worksheet. Obviously, this was a problem for 2018 and it was not addressed for 2019. I can only hope it will be fixed next year as the program is probably set in stone for this year.

(Sp Allocation is needed for the 199A even if there is not a 754 issue, as partnership can be complex little buggers).

S

spbAuthor

Level 3

I agree. I’m new to the program this year, but looking back at prior years, it seems that Intuit has persistently made the mistake of not allowing the asset entry worksheet for 754 basis step-ups to be linked to a specific partner, thereby requiring a special allocation on the K-1 worksheet instead of automating the process. If they would add a field to link the asset entry worksheet to the specific partner, it would help them to fix their QBI issues, as well as obviating the need for manual special allocations of 754 depreciation. Pretty easy fix, if they are open to suggestions. I spoke to a tech rep about the issue yesterday and the subject matter was way over his comprehension level.

C

CGS

Level 3

I'm only speaking to the 199A Worksheets not have the capability to reflect a Special Allocation.

On the Asset Entry Worksheet, if the box for 754 is checked "x", then the depreciation associated with that partner's asset step-up flows to Line 13W on Page 4 of the 1065. Line 13W can/does reflect Special Allocations either by a specific amount or percentage. These amounts are easily done on the K-1 Worksheets.

Since the 199A numbers do not flow to the page 4 or 5 of the 1065, there is no way to do an Allocation by specific amount or percentage.

Although, it would be great to be able to Specially Allocate individual activities...For Example, when there are multiple Rental Activities that various partners participate differently or when there is a change in ownership and there are Gains/Losses/4797 items that need specific allocations.

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