1065-US: Allocating beginning capital to the partners (FAQ)

Alerts and notices

Question

How is beginning capital allocated to the partners?

Answer

Beginning capital is allocated, or not allocated, based on whether the client was proforma'd, converted, or new.

  • Proforma'd clients - No action is necessary. UltraTax CS automatically proformas the total ending capital for all partners from the prior year to the Capital account - beginning of year field in Screen M1M2. In addition, UltraTax CS proformas the partners' specific amounts for the Ptr Alloc button.
  • Converted clients - The UltraTax CS Data Conversion Service converts only the total beginning capital for all partners and enters the amount in the Capital account - beginning of year field in Screen M1M2. Click the Ptr Alloc button, and allocate this amount by absolute dollar to the partners.
  • New clients - UltraTax CS does not automatically allocate beginning capital. Enter the total beginning capital for all partners in the Capital account - beginning of year field in Screen M1M2. Click the Ptr Alloc button, and allocate this amount by absolute dollar to the partners.

Note: Beginning capital can also be allocated in Partner Data Entry. Choose View > Partner Information, click the Allocations button, and enter the partner amounts in the column automatically established for beginning capital.

Related topic: Allocating partnership items to partners FAQs (1065)