Should Form 6198 line 4 include nondeductible expenses from Sch K-1 line 18?
Instead of reducing partner's basis by the nondeductible expenses, ProSeries carries the nondeductible expenses to line 4 and computes allowed and unallowed losses for the nondeductible expenses. The "allowed" portion isn't actually deducted on the return, but the "unallowed" portion shows on next year's line 4. Is this correct? Shouldn't the entire amount of nondeductible expenses be a reduction in basis in the year incurred and be done with?
If not on line 4, where should nondeductible expenses be shown on Form 6198 in the year incurred? Netted against capital contribution on line 7 for increases to at-risk amount? Or separately shown on line 9 for decreases?
Thanks in advance for your help.
Instead of reducing partner's basis by the nondeductible expenses, ProSeries carries the nondeductible expenses to line 4 and computes allowed and unallowed losses for the nondeductible expenses. The "allowed" portion isn't actually deducted on the return, but the "unallowed" portion shows on next year's line 4. Is this correct? Shouldn't the entire amount of nondeductible expenses be a reduction in basis in the year incurred and be done with?
If not on line 4, where should nondeductible expenses be shown on Form 6198 in the year incurred? Netted against capital contribution on line 7 for increases to at-risk amount? Or separately shown on line 9 for decreases?
Thanks in advance for your help.