1065-US: Liabilities used to calculate the partner's increase (decrease) in share of partnership liabilities (FAQ)

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Question

What liabilities are used to calculate the partner's increase (decrease) in share of partnership liabilities?

Answer

The 1065 basis worksheet is calculated using the basis rules only. Therefore, for all partners, UltraTax CS uses the total of all liabilities on Schedule K-1, item K, regardless of type, to determine the net increase or decrease for the basis worksheet. This calculation is according to the Partner's Instructions for Schedule K-1 (Form 1065), Worksheet for Adjusting the Basis of a Partner's Interest in the Partnership, lines 3 and 8.

Use the Share of partnership liabilities (Force) fields in Screen Basis in the Partner Info, Basis folder to force a different amount for prior-year and current-year nonrecourse, qualified nonrecourse, and recourse liabilities than UltraTax CS uses.

Notes

  • UltraTax CS does not calculate the at-risk limitation, which would exclude certain types of liabilities, or the passive activity limitation at the partnership level. These limitations are calculated at the partner level using Forms 6198 and 8582, respectively.
  • If the Section 752 information not provided field in the Federal tab in the Partner Information window in Partner Data Entry is blank, UltraTax CS adjusts each partner's increase (decrease) in liabilities by the decrease in liabilities resulting from the reacquisition and the decrease in liability treated as a distribution of money in the current year from section 108(i) elections entered in Screen CODI.

Related topic: Partner basis FAQs (1065)

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