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California

Partnerships and LLCs need to report capital accounts on Schedule K-1

Beginning in taxable year 2021, all [partnerships / LLCs] must report [partners’ / members’] capital accounts using the tax basis method on California Schedule K-1 (565/568). Current year net income/loss and other increases/decreases are now separately reported in columns (c) and (d), respectively

Scenario

You may get the following error message if you haven't entered information on Schedule K-1 correctly.
Error message
Beginning in taxable year 2021, all [partnerships / LLCs] must report [partners’ / members’] capital accounts using the tax basis method on California Schedule K-1 (565/568). Current year net income/loss and other increases/decreases are now separately reported in columns (c) and (d), respectively

Solution

Total Override with Special Allocation Codes
  1. Select
    California
    , then
    Schedule L and M
     worksheet.
  2. Find section
    Schedule M-2 Overrides
     lines 1-7.
  3. Select Form
    California
    , then
    CA9
    , fields 180, 181, 182, 183, 270, 244, and 245.
Partner-by-partner Override
  1. Select
    Partners
    , then
    Partner Information
    .
  2. Select the State Specific worksheet and go to section
    California General Options and Book Amounts
    .
  3. Enter the detail in lines 14-23.
  4. Select Form
    California
    , then
    CA9
    , fields 30, 122, 124-185, and 187.

This article applies to:

  • PRODUCT: ONESOURCE Income Tax Express RS
  • Return type: 1065 Partnership
  • State: California

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