Partner K-1

[peggysioux]

Taxpayer received a Partner K-1 showing an "Other Decrease of $5,000" in L - Partner's Capital Acct Analysis with an explanation of decrease of "Miscellaneous Deduction on Books and Not on Return". I use Drake Software and the only way I can reflect the $5,000 decrease in basis is if I input the $5000 in box 18, code C "nondeductible expenses". However tax preparer did not input anything in box 18. Being the K-1 does not show anything in box 18, I am unsure if there would be an issue if I input the $5000 in box 18 to get the correct tax basis for partner. How would other tax preparers handle?

Peggy Sioux

[ATSMAN]

I believe there is a partners adjusted basis worksheet that needs to be updated for changes in partner's tax basis.

You may want to post this question on the Drake Forum. They have some very experienced K-1 and 1065 experts there.