I have a client whose passive investment sold and now I need to reconcile his true basis with section L of the K-1 and the different amounts reported on the outside CPA's Partner's Basis Worksheet, along with box 9c and 10 on the K-1 for 1250 recapture and 1231 gains. How do I keep it simple to tie out depreciation recapture and true up basis if section L is way off the Partner's Basis Worksheet provided by outside CPA?
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The capital account on section L correlates to the "inside" Basis, which you really don't need to know.
In some cases the "outside" Basis may be different than the "inside" Basis, and that is what it sounds like in your case (at least according to the Basis worksheet you were provided). There is no need to reconcile them up or anything like that.
The only thing you need to know is the "outside" Basis, which seems to have been calculated by that outside CPA that you mentioned (although you may want to confirm that amount is correct). -
Did you/your client track his outside basis and now you need to report it? If so, what software do you use?Comment
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Currently using ATX tax software and its a new client. If I have the outside basis I am entering it in the personal K-1 1065 input sheet. Do I tie out the outside basis with box 10 section 1231 gains?Comment
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