K-1 reporting in Partnership Program

Forum|Forum|3 years ago
October 12, 2022
3 replies
18 views

I have a partnership that owns interests in "investment" partnerships, which have very complex K-1s. The Individual program is much more robust in its K-1 input than the Partnership program is. For example, the Partnership program does not even calculate/track basis in the partnership interest. Are there any plans to improve the handling of K-1 entities within the Partnership program in the near future, hopefully to bring it up to speed with how that information is received and processed in the Individual program?

Lacerte Tax

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S

strongsilence

Level 10

The partnership module produces this worksheet.

sjrcpa

Level 15

That's the first enhancement in this area in years.

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

sjrcpa

Level 15

They have been lacking in this area (for 1041s and 1120s, too) for the last 25 years. So don't expect anything in the near future.

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

S

strongsilence

Level 10

To mike and sjr,

Since you might be lurking...

do you know if at-risk and basis for each passive investment are required for a RE professional who has elected to group passive activities?

The taxpayer and spouse qualify to make the election.

I took over a client and have more facts but I'll just say that the prior CPA did not prepare basis schedule or at-risk forms. The client does not want to ask the prior CPA. I don't want to prepare these forms if not required.

Once two activities have been grouped into one larger activity, taxpayers only need to show material participation in the activity as a whole. Whereas, if the two activities are treated as separate activities, taxpayers must show material participation in each one.
(2)	If activities are grouped together for tax purposes, taxpayers will be in a better position to use up any suspended passive losses because taxpayers have disposed of their entire interest in that activity.
(3)	Grouping can also be important in determining whether a taxpayer satisfies the 10 percent ownership requirement for actively participating in a rental real estate activity.

S

strongsilence

Level 10

"Do you know if at-risk and basis for each passive investment are required for a RE professional who has elected to group passive activities? "

After more reading on this topic, I think the answer is that basis and at-risk calculation ARE required. Because activities can be grouped and regrouping are allowed, there is a possibility that an activity will be separate. Once separated losses will then be subject to basis and at-risk limits. Therefore, with that possibility, basis and at-risk calculation would be a good idea.

sjrcpa

Level 15

I agree.

Lurker.

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

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