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I was missing a K-1 when I filed last year. I worked with…

Customer Question
Hi, I was missing...

Hi, I was missing a K-1 when I filed last year. I worked with Turbotax once I got it to fill out a new form, but it showed the K-1 wouldn't have changed the amount. Do I still need to file an ammendment?

Accountant's Assistant: The Accountant will know how to help. Is there anything else the Accountant should be aware of?

NO, thanks

Submitted: 1 month ago.Category: Tax
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12/29/2017
Tax Professional: Patrick Mullis, Certified Public Accountant (CPA) replied 1 month ago
Patrick Mullis
Patrick Mullis, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 21
Experience: Capital Accounting Analyst / Financial Analyst at Norfolk Southern
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Hi my name is ***** ***** I look forward to helping you. Wher there any changes of amounts between the amount reported and the amount stated on the K-1 one that you eventually received? If both amounts are the same I do not think an amendment is necessary.

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Customer reply replied 1 month ago
I did not file a K-1 at all when I filed in the spring because I didnt receive it until recently, but just using turbotax to add it to my old taxes did not change my return amount (as I understand, there were losses). Do I still need to file an amendment.
Tax Professional: Patrick Mullis, Certified Public Accountant (CPA) replied 1 month ago

It would be beneficial to file an amendment because the loss would reduce your taxes in the previous year or allow you to carry the loss forward to offset future earnings. I would recommend amending, the IRS is not going to penalize you for not claiming a loss (only for not claiming income). However if you do not amend you may have overpaid the previous years taxes. Just to clarify, Did you plug it in to turbo tax (previous years version) and there was no change in tax liability?

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Customer reply replied 1 month ago
plugged it into Turbotax, and no change in liability.
Tax Professional: Patrick Mullis, Certified Public Accountant (CPA) replied 1 month ago

Did you include a basis calculation losses? (below could explain why the amount did not change)

The basis limitation is a limitation on the amount of losses and deductions that a partner of a partnership or a shareholder of a S-Corporation can deduct. The basis limits are the first of three limitations that are applied to Schedule K-1 losses and deductions. After the basis limits are applied, the At-risk limits (Form 6198) are applied. If losses are allowed by the basis and at-risk limits, the passive limits (Form 8582) are applied, if applicable.

Per Schedule E (1040), shareholders of S Corporations are required to attach a basis calculation to their tax return each year. There is no form for the basis limitation, but a worksheet, and some instructions have been provided in the partner and shareholder instructions for Schedule K-1.

It is important to note that the capital account shown on the Partner's K-1 is not the same as basis. According to the Partner's Instructions for Schedule K-1, the basis schedule represents outside basis while the capital account represents inside basis. These can differ, even when the partnership maintains its books and records on a tax basis. One way this difference can occur is when a partner buys his partnership interest from another partner, since the purchase price becomes the starting point for his outside basis. (For more information on general K-1 issues, please see K-1 Issues for Individual Taxpayers, General)

Computation

The starting point for the basis limitation is adjusted basis at the beginning of year. The adjusted basis at the beginning of the year is the ending adjusted basis from last year reduced by loss allowed in the previous year. In the initial year, basis is equal to the adjusted basis of property contributed to the partnership, plus any gain recognized on the contribution of property.

The following adjustments are made to arrive at the beginning adjusted basis used in applying the basis limitation:

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