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Reporting Partnership K-1s on Form 1040: Tax Basis Capital, Built-In Gains, and Step-Ups

Note: CLE credit is not offered on this program

Recording of a 110-minute CPE webinar with Q&A

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Conducted on Friday, March 22, 2024

Recorded event now available

or call 1-800-926-7926

This course will review the recent changes made to Schedule K-1 (Form 1065) and guide practitioners to report individual line items on individual income tax returns.

Description

Although practitioners have grasped many of the changes to Schedule K-1 (Form 1065) resulting from the recent tax reform, the IRS continues to make significant changes to this schedule. Negative tax basis capital reporting is now required, built-in gains and losses are included, and Section 743(b) basis adjustment amounts have been added to the K-1. These are only three of the multiple changes made recently to this schedule.

Even in the past, correctly reporting K-1 activity was challenging. To some degree, the changes are welcome, providing tax professionals with information that some felt was necessary and lacking. Accurately reporting the information from a K-1 is critical to correctly calculating a taxpayer's taxable income, carryforwards, and basis.

Each of the lines and respective amounts represents a separate reporting obligation. Line 20, Other Information, can be particularly troubling and now includes 23 reporting options from A to AH.

Listen as our panel of experts reviews the changes made to Schedule K-1 for flow-through entities due to tax reform and the latest changes made to the schedule. They will explain the significance of each box and where and how to report each on the taxpayer's Form 1040.

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Outline

  1. Income items, Lines 1-11
  2. Deductions and losses
  3. Other reporting items
  4. Section K: recourse, nonrecourse debt, and QNR liabilities
  5. Capital account reporting
  6. Additional reporting obligations

Benefits

The panel will review these and other vital issues:

  • Recent changes made to Schedule K-1
  • Reporting differences based on liability type
  • Where to report box 11, Other Income (loss) items on 1040
  • The effect of tax basis capital balances on 1040 reporting

Faculty

Alfonsi, John
John T. Alfonsi, CPA
Managing Director
Cendrowski Corporate Advisors

Mr. Alfonsi has 25 years of tax consulting, business valuation, litigation support and forensic accounting experience....  |  Read More

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