How do we report partner's tax basis capital on 1065 K-1 and still show GAAP basis balance sheet on Schedule L?

Forum|Forum|5 years ago
February 8, 2021
21 replies
126 views

Client has GAAP books and previously reported GAAP basis capital accounts on K-1. Entering tax basis adjustment on K-1 worksheets results in Schedule L no longer matching books. But, 1065 instructions clearly state that Schedule L must match books & records.

Clearly, K-1 capital accounts and Schedule L should not be linked. Will ProSeries fix this before the filing deadline?

ProSeries Professional

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JRC

Level 7

On Schedule L Form 1065 Page 5. You can change the amount of Line 21 to match your Book Capital Accounts.

sjrcpa

Level 15

M-2 is tax basis now.

The more I know the more I don’t know.

JRC

Level 7

Thank you.

A

amyebeth

Level 3

Is overriding the M-1 beginning number and income number the only solution that has been found for this so far?

I am on the phone with Proseries right now and they don't seem to have any solution for me. Lacerte already has a fix, we need one too. https://proconnect.intuit.com/community/balance-sheet/help/tax-basis-capital-account-reporting/00/120455

While an override may work, that is not a long term solution when all partnership K-1s are supposed to be on a tax basis going forward.

L

LVCPA1

Level 3

I haven't seen any solutions.

D

DTNY07

Level 6

Are there still override issues? If so, how is that possible on May 3rd. Like a dope, I marked someone as GAAP basis last year, when I should have marked it tax basis. All my other partnership clients were tax basis as well, so this is the first one I've come across with this