Level 2

Recourse Beginning on K-1 1065 to Form 1040

Forum|Forum|3 years ago
September 27, 2022
1 reply
7 views

I have a client with several K-1 1065s along with other various forms of income. I have several years of 1040 returns to prepare. In several of the K-1 1065 information taken from the IRS Wage/Income Transcripts, there is a Recourse Beginning figure. Where is this entered on the 1040? IRS is nailing clients if this is not entered or accounted for on the 1040. Any help is greatly appreciated.

ProSeries Tax

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sjrcpa

Level 15

"IRS is nailing clients if this is not entered or accounted for on the 1040."

Really? There is no place this shows on the 1040.

It does enter into the basis/at risk calculation.

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

P

PTL1Author

Level 2

I agree with you. There is no place to enter this on the 1040, even when entering the K-1 information in preparing the 1040. However, we have just recently had one of our clients get hammered by IRS because the Recourse Beginning figure was not accounted for on the 1040. I have searched and searched but have not been able to find a resolution yet. If and when I do, I will certainly post it for everyone to see.

Thank you for your reply.

sjrcpa

Level 15

What software are you using?

What do you mean by "we have just recently had one of our clients get hammered by IRS because the Recourse Beginning figure was not accounted for on the 1040"?

Was there a deemed distribution due to a decrease in liabilities that wasn't picked up? Was the basis computed incorrectly and too much loss was deducted?

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

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