I'm the original poster, @beanorama1 , using a different account. (I can't access that account since posting it, because Intuit now denies that the user ID we all can see exists.)
Thank you, @PatriciaV , for noting the difference between inside and outside basis. Inside basis is the partnership's to track; outside is for each partner individually. The tool I found, the Partner's Basis Statement, found in TTB to produce the partnership's Form 1065 return, tracks the worksheet found in the *Partner's* Instructions for Schedule K-1, for calculating the *outside* basis. Technically, that's not the partnership's concern. As the IRS Instructions for Form 1065 state, p34, they are not the same: "The partner's ending capital account as reported using the tax-basis method in item L might not equal the partner's adjusted tax basis in its partnership interest."
The adjusted basis of our partnership interests is not my concern right now. My immediate concern is getting TTB to correctly report our ending capital accounts in Schedule M-2, so Schedule L will reconcile and our Schedule K-1s will be correct.
I'm still looking for resources in understanding the *inside* basis, as it may help me see why the Schedule M-2 is not calculating our ending capital accounts correctly per our balance sheet. It's seemingly missing a (net) decrease of about $7k.
Since our accounting is very simple -- cash basis, no property -- our corrected balance sheet is also very simple. I'm just not finding anything in it that should be in M-2 line 7 to decrease our capital account.
