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Fixed Assets and UltraTax CS 2023 help is now on Help and Support. We're still moving articles, but you can find most content for the 2023 tax year there. Continue using the Help & How-To Center for tax years 2022 and older.

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 CS 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 instructions, the AMT depreciation adjustment from a K-1 pass-through 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-2 in the Schedule K folder.

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