Question

E-File 1065 Schedule K-1 With Negative Capital

Forum|Forum|2 years ago
March 14, 2024
2 replies
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TurboTax is not allowing e-file of form 1065 with negative capital in Schedule K-1. Is there a way to get around this?

TurboTax Home & Biz Windows

Please clarify: Can you identify what caused the partner's basis to be negative?

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Rick19744

@PatriciaV this section does not represent a partner's basis.

Schedule K-1 box L represents a partner's share of the partnership "book equity" determined on a tax basis and this could be negative due to partnership losses and a thinly capitalized structure.

This is even noted in the instructions to the K-1:

For many reasons, your ending capital account as reported to you by the partnership in item L may not equal the adjusted tax basis in your partnership interest.

Having said that, @ChicagoTaxGuy you are asking a question about TT Business software but it appears you are asking the question from TT Home & Business software which is a personal tax software. Some clarification may be helpful to @PatriciaV

*A reminder that posts in a forum such as this do not constitute tax advice.Also keep in mind the date of replies, as tax law changes.