1040-US: Data sharing basis information from 1065 and 1120S clients to 1040 clients

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Question

How is partner and shareholder basis information shared from 1065 and 1120S clients to 1040 clients?

Answer

The data sharing feature enables you to share partner and shareholder basis information from 1065 and 1120S clients to 1040 clients. In addition to basis items that are automatically shared, you may choose to share beginning-of-year basis balances and prior-year suspended basis losses to 1040. The following information identifies basis items that are automatically shared, how to share beginning-of-year basis and prior-year suspended basis losses, and how to prevent basis information from being shared.

Items that are automatically shared

The following basis items are automatically shared.

  • Schedule K-1: Any item reported on Schedule K-1 that is normally shared, such as property distributions. For information on which Schedule K-1 data is not shared, see Federal K-1 financial data not shared (PDF). (You will need Adobe Reader to view the PDF. If you don't have the current version or if you have difficulty opening the PDF, you can download and install the latest version of the Adobe Reader from the Downloads page of the Adobe website.)
  • From 1065:
    Form/Worksheet Item
    Partner's Basis Worksheet, Page 1 Capital contribution: Cash
    Partner's Basis Worksheet, Page 1 Capital contribution: Property (adjusted basis)
    Partner's Basis Worksheet, Page 1 Increase in share of partnership liabilities
    Partner's Basis Worksheet, Page 1 Decrease in share of partnership liabilities
    Partner's Basis Worksheet, Page 1 Excess depletion
    Partner's Basis Worksheet, Page 1 Other basis increases
    Partner's Basis Worksheet, Page 1 Other basis decreases
    Partner's Schedule K-1 Nonrecourse liability
    Partner's Schedule K-1 Qualified nonrecourse liability
    Partner's Schedule K-1 Recourse liability
  • From 1120:
    Dialog / Tab Field

    Shareholder Information dialog > Other Info tab

    Choose View > Shareholder Information to open the Shareholder Information dialog.

    		 Shareholder health insurance (Not included on the shareholder's Form W-2)

    Shareholder Basis dialog > Stock tab

    Choose View > Shareholder Information and click the Shareholder Basis button on the Shareholder tab to open the Shareholder Basis dialog.

    		 Capital contributions
    Other increases
    Other decreases

    Shareholder Basis dialog > Loan tab

    Choose View > Shareholder Information and click the Shareholder Basis button on the Shareholder tab to open the Shareholder Basis dialog.

    		 Loans to corporation
    Other increases
    Other decreases
    Face amount shareholder loan (Mandatory)

    Shareholder Basis dialog > Suspended Losses tab

    Choose View > Shareholder Information and click the Shareholder Basis button on the Shareholder tab to open the Shareholder Basis dialog.

    		 Regulation 1.1367-1(g) election (w/Election)
    Suppress 1367 election statement
    Suppress proforma of nondeductible expenses

Beginning-of-year basis balances and prior-year suspended basis losses

Beginning-of-year basis balances and prior-year suspended basis losses are not automatically shared from 1120S and 1065 clients to 1040 clients. If you need to share this information (if this is the first year preparing a shareholder's or partner's return, for example), you can indicate this in the application. (For 1040 clients, end-of-year balances and carryovers proforma into the next year's application.)

Data sharing beginning-of-year basis balances and prior-year suspended basis losses will overwrite any data proforma'd in 1040 for these items.

Click here to share data for 1120S clients

Do one of the following:

  • To share beginning-of-year basis balances and prior-year suspended basis losses for all shareholders, enter X in the Data share beginning of year basis and prior year suspended losses for all shareholders field in the 1120S Information section of Screen 1120, located in the General folder of 1120.
  • To share beginning-of-year basis balances and prior-year suspended basis losses for individual shareholders, enter X in the Data share beginning of year basis and prior year suspended losses field in the Shareholder Basis dialog. To access this dialog in 1120, open an 1120 client, choose View > Shareholder Information, click the Shareholder Basis button in the Shareholder tab, and click the Suspended Losses tab.

Click here to share data for 1065 clients

To share beginning-of-year basis balances and prior-year suspended basis losses for all partners in a 1065 client, enter X in the Data share beginning of year basis and prior year suspended losses field in Screen Basis, located in the Partner Info Basis folder.

Note: Data sharing for beginning-of-year basis balances and prior-year suspended basis losses for individual partners in a 1065 client is not available.

Preventing basis information from being shared

To prevent basis information from being shared, you may suppress either the calculation of basis worksheets in the 1065 or 1120 client, or the sharing of basis information when the basis worksheets are calculated in 1065 or 1120.

Click here to suppress the calculation of basis worksheets for 1120S clients.

To suppress data sharing of basis information for all shareholders by suppressing the calculation of the basis worksheet, enter X in the Suppress calculation of shareholder basis worksheet field in Screen 1120, located in the General folder of 1120. The shareholder basis worksheets will not calculate in 1120 and data will not share to 1040 clients.

Click here to suppress the calculation of basis worksheets for 1065 clients.

To suppress data sharing of basis information for all partners by suppressing the calculation of the basis worksheet, enter X in the Suppress calculation of partner basis worksheets field in Screen Basis, located in the Partner Info Basis folder of 1065. The partner basis worksheets will not calculate in 1065 and data will not share to 1040 clients.

Click here to suppress the sharing of basis information from 1120 to 1040 clients.

Do one of the following to prevent basis information from sharing when the shareholder basis worksheets are calculated in 1120.

  • To suppress data sharing of basis information for all shareholders, enter X in the Suppress data share of basis wrk for all shareholders field in Screen 1120, located in the General folder of 1120.
  • To suppress data sharing of basis information for individual shareholders, mark the Suppress data share of shareholder basis information checkbox in the Shareholder Basis dialog, which is accessible in 1120 by choosing View > Shareholder Information, clicking the Shareholder Basis button in the Shareholder tab, and clicking the Suspended Losses tab.

Click here to suppress the sharing of basis information from 1065 to 1040 clients.

To prevent basis information from being shared when the partner basis worksheets are calculated in 1065, enter X in the Suppress data share of partner basis information field in Screen Basis, located in the Partner Info Basis folder of 1065. This option will be applied to all partners in the partnership.

Note: You cannot suppress the data sharing of partner basis information for individual partners in 1065.

Related topic: Schedule K-1 data sharing FAQs (1040)

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