The basis reported on Schedule K-1 is the "inside basis" of the shareholder, which may not be the same for the shareholder's "outside" basis due to transactions and income/expense allocations that may be specific to that shareholder's investment in the corporation. This is why you need to track your basis independently from Schedule K-1.
Allocated nonrecourse liabilities generally add to a partner's basis for distribution purposes and the allocation of deductions relating to the liabilities.
The IRS provides a worksheet to assist in tracking your basis. This Partnership Basis Worksheet is provided in the IRS Partner’s Instructions for Schedule K-1 (Form 1065).
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