K-1 Footnote

Forum|Forum|5 years ago
July 15, 2020
1 reply
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K-1 footnote reads:

...LP has an underlying interest in ...LLC which has passed through to you an IRC step up deduction for 2019. This amount should be reported as additional amortization expense.

Please advise as to how or where I would input this into TT. I have successfully inputted the rest of the K-1 and this is my only pending issue.

Thanks for any guidance you can provide.

CMCCMCAuthor

Level 2

@DavidS127. Your post was excellent and I am hoping you would have a few minutes to review the above. Thanks.

DavidS127

Level 13

More information may help resolve your issue. For example, what "box and code" was used to report this amount on your K-1?

See at this link the IRC step-up rules for an optional adjustment to the basis of partnership property, that results from the transfer of an interest in a partnership by sale or exchange, or on the death of a partner. If this applies to your partnership interest, see the section (4) a little more than half-way down the "scroll", on the Effect of basis adjusment in determining items of deduction.

This is essentially saying that the partner recognized an asset for the increase in the basis of your partnership assets, and is amortizing that adjustment over a specified recovery period. I presume your share of that deduction is passed to your on the K-1.

I recommend reaching out to the preparer of the K-1 for guidance on how to deduct this on your personal tax return.

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