AMT Depreciation Adjustment from K-1 Pass-through Entity

Alerts and notices
Leave feedback

Internal Employees: Submit feedback

Contact information (optional):

Leave this blank:

Please tell us how we can make this information more helpful.


Characters left:

MFA required for electronic filing

Effective May 3rd, the 2017 version of UltraTax CS requires multi-factor authentication (MFA) to transmit e-files from CS Connect. Find out more.

Question

Why doesn’t the AMT depreciation adjustment from the K-1 pass-through transfer to Form 1120S, Schedule K, line 15a?

Answer

The Partner’s Basis Worksheet tracks the corporation’s basis in the K-1 pass-through entity.

UltraTax/1120 calculates the Partner’s Basis Worksheet for both regular tax and AMT purposes. The AMT depreciation adjustment from the K-1 pass-through is used to calculate the AMT basis worksheet. The AMT basis adjustment reported on Form 1120S, Schedule K, line 15f is equal to the difference between the K-1 pass-through income allowed by basis for regular tax, and the K-1 pass-through income allowed by basis for AMT purposes.

Because the AMT depreciation adjustment is a part of the AMT basis adjustment reported on Form 1120S, Schedule K, line 15f, it is not included on Form 1120S, Schedule K, line 15a.

Based on the Form 6251 and Form 4626 instructions, the AMT depreciation adjustment from a K-1 pass-though entity should not be reported on the line for depreciation adjustment if the basis limitations apply. Instead, the AMT depreciation adjustment is taken into account on the line used for reporting loss limitations.

To continue to report the AMT basis adjustment on Schedule K, line 15a, enter zero in the Basis Adjustment (Schedule K-1) field in Screen StmtS4 in the Review folder, and enter the desired AMT depreciation adjustment in the Post-1986 depreciation adjustment (Force) field in Screen K in the Schedule K folder.

Related topic: Partner's Basis Worksheets FAQs

Share This