1065-US: Entering information for Schedule K-1, item L to report partners' capital using the selected capital account accounting method (FAQ)

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Question

Where do I enter information for Schedule K-1, item L to report partners' capital using the selected capital account accounting method?

Answer

Enter the partners' capital account information in the Analysis of Partners' Capital Accounts section in Screen M1M2 in the Balance Sheet folder. Enter amounts using the capital account accounting method you entered in Screen K1Misc.

Notes

  • The IRS has clarified in the instructions to Form 1065 and on its website in Form 1065 - Frequently Asked Questions that the amounts on a partnership's Schedule M-2 should equal the totals of the amounts reported in item L of Schedule K-1 for all partners. Therefore, UltraTax CS automatically uses amounts entered in Screen M1M2 in the Balance Sheet folder for both Schedules K-1 and M-2.
  • To access IRS frequently asked questions on the IRS website from a client's return, choose Help > Tax Subject Index, click the Web Form Instructions option, highlight the IRS Tax Information for Partnerships link, and click Go To.

Related topic: Partner capital FAQs (1065)

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