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Specially allocating capital accounts for a partnership or LLC return in Lacerte

by Intuit• Updated 1 month ago

For more Schedule K-1 resources, check out our Tax topics page for Schedule K-1 where you'll find answers to the most commonly asked questions.

To enter and specially allocate amounts for Schedule K-1, Item L, partner's capital account analysis:

  1. Go to Screen 28, Schedule M-2 (Capital Account).
  2. Enter the Beginning capital (this amount will proforma from the prior year).
  3. Locate the Contributed Capital subsection.
    • Enter the cash and property.
    • In the field Other increases (+)(Ctrl+E) enter the description and amounts. If a description is not entered you won't be able to specially allocate the amounts later.
  4. Locate the Distributions subsection.
    • Enter the cash and property.
    • In the field Other decreases (+)(Ctrl+E) enter the description and amounts. If a description is not entered you won't be able to specially allocate the amounts later.

To specially allocate the capital contributed amounts:

  1. Go to Screen 29, Special Allocations.
  2. Select the + to expand the Capital Account (Sch. K-1, Item L) section in the left menu.
  3. Select Beginning Capital (enter total in Scr. 28) from the left menu, and allocate the amounts to the applicable partners.
  4. Select Capital contributed during the year (enter total in Scr. 28) from the left menu, and allocate the amounts to the applicable partners.
  5. Select the + to expand the Other increases folder.
    • Select the description you entered on Screen 28, Schedule M-2 (Capital Account) and allocate the amounts to the applicable partners.

To specially allocate the capital distributed amounts:

  1. Go to Screen 29, Special Allocations.
  2. Select the + to expand the Capital Account (Sch. K-1, Item L) from the left menu.
  3. Select the Distributions folder.
  4. Select Cash & Marketable Securities (enter total in Scr. 28) if applicable, and allocate the amounts to the applicable partners.
  5. Select Property (enter total in Scr. 28) if applicable, and allocate the amounts to the applicable partners.
  6. Select the Other decreases folder, if applicable.
    • Select the description you entered on Screen 28, Schedule M-2 (Capital Account) and allocate the amounts to the applicable partners.

To change the setting globally (apply to all returns):

  1. Go to Settings then select Options.
  2. Go to the Tax Return tab.
  3. Scroll down to the Federal Tax Options section.
  4. Locate the Capital Account Reconcilation option.
  5. Select Per partner from the dropdown menu.

To change the setting for a single client

  1. Go to Screen 3, Miscellaneous Information.
  2. Scroll down to the User Option Overrides section.
  3. Enter a 3 in Capital account reconciliation: 1=condensed, 2=expanded, 3=per partner [O].
  1. Go to Screen 28, Schedule M-2 (Capital Account).
  2. Enter -1 in Ending capital [O].

To set the ending capital to zero for one specific partner:

  1. Go into Screen 32, Schedule K-1 Miscellaneous.
  2. Select the specific partner for whom you'd like to suppress the ending capital in the Partner list in the top left corner.
  3. Enter -1 into the field Ending Capital (-1 only).
  4. Repeat this for each additional partner.
Lacerte Tax 2019Lacerte Tax 2020Lacerte Tax 2021

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