Question

on a partners schedule k-1 item L    A is required when schedule B line 4 is checked yes B Is completed only when the partnership uses GAAP accounting C Shows any increase in the partners capital account    D Reports the partners basis in the partnership

Answer 1

Item L of schedule k-1 which is filed by the partnership firms, will show the details as to any increase in the partners capital account.

In item L of schedule k-1, The partnership will report the capital account on the tax basis. For item L, “tax basis capital” means (i) the amount of cash plus the tax basis of property contributed to a partnership by a partner minus the amount of cash plus the tax basis of property distributed to a partner by the partnership, net of any liabilities assumed or taken subject to, in connection with such contribution or distribution; plus (ii) the partner's cumulative share of partnership taxable income and tax-exempt income; minus (iii) the partner's cumulative share of taxable loss and nondeductible, noncapital expenditures.