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Lacerte Reducing Partner's Basis by UPE?
My client is a partner in a law firm. He has UPE that is not reported through the K-1 (for purposes of this question, please assume the UPE is allowed by the partnership agreement etc). When I enter the UPE on Lacerte screen 20.1, the UPE shows up as expected on Schedule E. But it also reduces the partner's basis. I thought that UPE was not supposed to affect basis. If this is the case, do I also need to make an offsetting adjustment as Other Current Year Increase to Basis in the basis limitation section of the screen? Thank you in advance.
