Preparing a partnership return in Lacerte

Down below we'll briefly go over the general flow of completing a partnership (Form 1065) return in Lacerte, as well as some potential next steps.

1. Create the partnership client in Lacerte. To do so, from the toolbar, select Clients and from there, select Tax type, and then select Partnership. 
2. Once done, you’ll be presented with your partnership client list, and it is from here that you can create a new partnership client. Go to Client, and select Add. From here, assign a client number and indicate whether or not you want to password-protect this client, and then select OK.
3. Add partners on Screen 7, Partner Information.
4. Add partner percentages on Screen 8, Partner Percentages.
   • For more info on this, see here.
5. Now that you’ve set up their partnership return, to begin reporting for the main form, information and amounts may be entered as follows.
   • If you need to report a change in ownership, go to Screen 9.1, Change in Ownership.
     • For more info on this, see here.
   • Inputs for reporting income (lines 1a-8) can be found on Screen 10, Income.
   • Inputs for reporting deductions (lines 9-22) can be found on Screen 13, Deductions.
   • If you need to perform special allocations, go to Screen 29, Special Allocations.
     • For more info on this, see here.
   • The final section of the main form that pertains to tax and payments is a combination of direct inputs and calculations. Here are some resources that may help:
     • Using the e-file estimated payment wizard
     • Entering additional estimated tax payments
6. As for Schedule B, go to Screen 5, Other Information (Schedule B). Some important considerations include:
   • If you need to suppress Schedules L, M-1, and M-2.
     • For more info on this, see here.
   • If you need to force Schedules L, M-1, and M-2 to generate.
     • For more info on this, see here.
7. As for Schedule K, select the appropriate screen under the Schedule K section along the top of the workspace.
   • Amounts from the Schedule K will flow to the partner's Schedule K-1 based on their ownership % from Screen 8, Partner Percentages.
   • If you have other deductions or income (loss) that you need to report at the Schedule K-1 level, go to Screen 22, Other Schedule K items.
     • For more info on this, see here.
8. As for Schedules L, M-1, and M-2, you may need to do the following, depending on the situation:
   • To balance your Schedule L, go to Screen 24, Balance Sheet ⮕ Federal.
     • For more info on this, see here.
   • If you need to manually enter items on Schedule M-1, go to Screen 27, Schedule M-1, M-3 ⮕ Schedule M-1. 
     • For more info on this, as well as how the Schedule M-1 is calculated, see here.
   • If you need to report an analysis of the partners' Capital Accounts, go to Screen 28, Sch M-2 (Capital Account).
     • For more info on this, see here.
   • If this is the partnership’s final year, go to Screen 28, Sch M-2 (Capital Account) to zero out their Capital Accounts in the Distributions subsection.
     • For more info on this, see here.
9. Depending on the situation, additional forms and schedules may need to be completed. Down below are a couple common scenarios:
   • If you need to generate Schedules K-2 and K-3, go to Screen 78, Partners' Distr. Share Items - Int'l. (Sch. K-2).
     • For more info on this, including info on who must file, see here.
   • Add state-specific inputs
10. Once you’ve completed the return and validated all required information is entered with the required forms and schedules generating, you can either e-file the return, or print it for the purpose of review or paper-filing.