How to enter partner's capital account analysis from k-1

Forum|Forum|3 years ago
February 25, 2023
1 reply
16 views

How to enter K-1 part I information

ProConnect Tax

This topic has been closed for replies.

Best answer by jbtaxprep

Thanks. I saw the basis, which is different than what it states on the K-1 as you mentioned. This particular tax client was given a payout to sell her 8.33% investment and the payout shows in the Section I box L. Interestingly enough the basis I show in Intuit from prior years of this K-1 is around $126+k and she had a payout of about $128+k, the current year K-1 shows a decrease in basis of $97+k as transfer of capital to the client. I entered the decrease in basis as reported on the K-1 but don't see it flow through as income for her. I know it should be reported as a sale of a Capital Asset, do I report this on schedule D with the basis in the investment as shown on the current K-1? I don't do a lot of work with K-1's like this so am a little unsure how to proceed.

George4Tacks

Level 15

Find Basis in the listing across the top, between State & Local and At-Risk.

This may or may not be the same as on the K-1. Only the client will know (maybe even not even the client).

Answers are easy. Questions are hard!

J

jbtaxprepAuthorAnswer

Level 3

Thanks. I saw the basis, which is different than what it states on the K-1 as you mentioned. This particular tax client was given a payout to sell her 8.33% investment and the payout shows in the Section I box L. Interestingly enough the basis I show in Intuit from prior years of this K-1 is around $126+k and she had a payout of about $128+k, the current year K-1 shows a decrease in basis of $97+k as transfer of capital to the client. I entered the decrease in basis as reported on the K-1 but don't see it flow through as income for her. I know it should be reported as a sale of a Capital Asset, do I report this on schedule D with the basis in the investment as shown on the current K-1? I don't do a lot of work with K-1's like this so am a little unsure how to proceed.

sjrcpa

Level 15

Capital account hardly ever equals basis.

Does the K-1 show zero ending capital?

The 97K decrease is what was needed to bring the capital account down to zero.

Use your basis numbers, and use the actual sale price.

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

Sign up

Login with SSO

Let's get you signed in

Login with SSO