CONTINUING EDUCATION FOR TAX & FINANCIAL PROFESSIONALS

All New and Current customers who purchase the Premium, Plus, or Core (Total Value Package) 2021 Federal Tax Update or the 2021 Federal and California Update will get the Tax Advisory Complement Bundle for free.

NOTE:

  • New Federal Tax Update customers will get an immediate email with a coupon code for the free course once their Tax Update purchase is complete.
  • Current Customers that purchased the Premium, Plus, or Core (Total Value Package) 2021 Federal Tax Update will get an email with a coupon code to get the Tax Advisory Complement Bundle for free.

5 Changes to Note on New Draft of 2019 Form 1065 K-1 October 11, 2019

The IRS has released a draft of the 2019 Form 1065 K-1. Whether you prepare partnership and LLC returns and their accompanying K-1s or whether you input your clients’ K-1 to their personal tax returns, the changes are important to note.

New Draft 2019 Form 1065 K-1 - CPE for CPAs - Tax Update

5 Changes to Note on New Draft of 2019 Form 1065 K-1

  1. The partner’s capital account must be reported on a tax basis. In prior years, the partner’s basis could be reported as tax basis, GAAP, §704(b) book or other. Requiring tax basis reporting will help the IRS to target potential losses claimed in excess of basis.
  2. The partner’s beginning and ending §704(c) gain (or loss) must be entered at Part II, N. If the basis of contributed property differs from its FMV at contribution, §704(c) requires gain (or loss) with respect to such property to be allocated to the contributing partner. The purpose of §704(c) is to prevent taxable gain or loss inherent in property at the time of contribution from being shifted to another partner.
  3. Separate lines have been added for guaranteed payments for services and guaranteed payments for capital (Part III, lines 4a and 4b).
  4. Lines 21 and 22 have been added to Part III to report “more than one activity for at-risk purposes” and “more than one activity for passive activity purposes.”
  5. Section 199A information will be reported on a supplemental schedule, instead of being detailed on the K-1 itself. Part III, line 20, code Z will direct the partner to the attachment. The supplemental schedule will report (1) qualified business income, (2) W-2 wages, (3) unadjusted basis -UBIA, (4) REIT dividends, and (5) PTP income. In addition, the supplemental schedule will report if the qualified business income is from a specified service trade or business (SSTB).

Sharon Kreider, CPA, has helped more than 15,000 California tax preparers annually get ready for tax season. She also presents regularly for the AICPA, the California Society of Enrolled Agents, CCH Audio, and Western CPE. You’ll benefit from the detailed, hands-on tax knowledge Sharon will share with you—knowledge she gained through her extremely busy, high-income tax practice in Silicon Valley. With her dynamic presentation style, Sharon will demystify complex individual and business tax legislation. She’s a national lecturer for business and professional groups and consistently receives outstanding evaluations. In 2014, she was awarded the prestigious AICPA 2014 Sidney Kess Award for Excellence in Continuing Education.

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DIG DEEPER:

How The $3.5 Trillion Budget Blueprint Could Impact Your Clients

The new reporting requirements on brokers are addressed in Section 80603 of the bill. “Broker,” by definition in Sec. 6045 (c)(1), is expanded to include “any other person who (for a consideration) regularly acts as a middleman with respect to property or services…A person shall not be treated as a broker with respect to activities consisting of managing a farm on behalf of another person.” In turn, the bill defines a “digital asset” as “any digital representation of value which is recorded on a cryptographically secured distributed ledger or any similar technology as specified by the Secretary.