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#1
07-21-2003, 12:50 AM
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 Re: Not Making the 754 election "david banford" <dban1957[at]aol.com> wrote: - quote - > I am curious on how most practitioners handle the problem on
We set up the difference, even if negative, in a balance> partnership returns when the inside basis does not equal the > outside basis. > For example, a partner dies and the estate values his > partnership interest at $300,000 but his capital account is > $500,000. The partnership does not make the 754 election. > Question: Do practitioners create a dummy account (balance > sheet item) on the partnership return for the $200,000 > difference ($500,000 capital account less the $300,000 FMV) > Or do you leave the partnership books alone, making the > successor's capital account $500,000 on the tax return, and > keep track of the basis outside of the partnership. > Any input on this would be greatly appreciated. sheet account with the balancing entry to capital. If all or part of the asset is depreciable property, we show an annual "depreciation" entry that we refer to as non-deductible. Then we code our tax software in such a way that the partner whose basis changed is the only one with a "non-deductible" transaction. Mike Lewis, CPA << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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07-18-2003, 07:24 PM
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| Re: Not Making the 754 election "david banford" <dban1957[at]aol.com> wrote: - quote - > I am curious on how most practitioners handle the problem on
If the partner's capital is greater than his value on a> partnership returns when the inside basis does not equal the > outside basis. > For example, a partner dies and the estate values his > partnership interest at $300,000 but his capital account is > $500,000. The partnership does not make the 754 election. > Question: Do practitioners create a dummy account (balance > sheet item) on the partnership return for the $200,000 > difference ($500,000 capital account less the $300,000 FMV) > Or do you leave the partnership books alone, making the > successor's capital account $500,000 on the tax return, and > keep track of the basis outside of the partnership. change of ownership interest, I wouldn't do a thing and track the basis separately from capital. -- David M. Woods, EA Boston, MA 02109 Postings here are general information only and not to be relied upon as advice. << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#-1
07-17-2003, 02:07 PM
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| Not Making the 754 election I am curious on how most practitioners handle the problem on partnership returns when the inside basis does not equal the outside basis. For example, a partner dies and the estate values his partnership interest at $300,000 but his capital account is $500,000. The partnership does not make the 754 election. Question: Do practitioners create a dummy account (balance sheet item) on the partnership return for the $200,000 difference ($500,000 capital account less the $300,000 FMV) Or do you leave the partnership books alone, making the successor's capital account $500,000 on the tax return, and keep track of the basis outside of the partnership. Any input on this would be greatly appreciated. << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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