Welcome Guest. Register Now!  


CPA Forums CPA related topics.


Reply
 
LinkBack Thread Tools Search this Thread Display Modes
  #1 (permalink)  
Old 04-10-2015, 12:29 PM
Junior Member
 
Join Date: Apr 2015
Posts: 1
Recording K-1 activity in partnership

I have a bookkeeping client that is a partnership. This partnership A owns 50% of another partnership B. They (B) issued the K-1. I have not had lot of these but in the past, I record the K-1 activity (income items and the distributions are usually are there) and my investment account on the partnership A book will match the K-1 ending capital account from B. I am new to this account but that is exactly what the prior accountant did also for the prior years. It worked in the prior years.

This year is it off. I asked the CPA that prepared the return. He said he thinks it is a book to tax depreciation difference, or atleast most of it is. I am not sure how to record that to make my investment account match the ending capital account on B's K-1. How do you book the extra $12,000? Should it be an other expense and take it this year or do I book a balance sheet account because I assume I will keep seeing this and eventually it would zero out (assuming new assets were not purchased) once book matched tax.



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
  #2 (permalink)  
Old 04-10-2015, 03:17 PM
Moderator
 
Join Date: Oct 2010
Posts: 4,836
Quote:
Originally Posted by tncpa96 View Post

This year is it off. I asked the CPA that prepared the return. He said he thinks it is a book to tax depreciation difference, or atleast most of it is. I am not sure how to record that to make my investment account match the ending capital account on B's K-1. How do you book the extra $12,000? Should it be an other expense and take it this year or do I book a balance sheet account because I assume I will keep seeing this and eventually it would zero out (assuming new assets were not purchased) once book matched tax.
I guess for form 1065 Sch M-1 Book/Tax Differences adjustments, you need to add the excess depreciation expenses of $12K to your book income as part of deferred tax assets to arrive at taxable income.On the contrary, this means that tax depreciation in excess of book depreciation or accrued expenses which were not deductible in the prior year but which were satisfied in the current year are subtracted from book income to arrive at taxable income as deferred tax liaiblities, so vice versa .



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
Ads
Reply


Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

vB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Passive activity loss carry over nbalu1974 Rental Real-Estate 1 02-23-2014 06:41 AM
What is the Impact of a Passive Activity classification? TaxGuru Rental Real-Estate 0 01-21-2011 02:18 PM
Recording purchase of stock jwkeefe S-Corporation 0 12-31-2009 09:19 AM
Deducting Passive Activity Losses workout Rental Real-Estate 1 02-07-2009 11:03 PM
S-Corp Zero Activity BBilotta S-Corporation 1 09-22-2008 04:26 PM

Follow us on Facebook Follow us on Twitter Google Buzz Rss Feeds

» Categories
 
Individual
 » Income
 » IRA/Sep
 » Medical
 
Corporations
 » Payroll
 
Forum for CPAs
 
Financial Planning