LLC 3 partners K-1

Key tips and advice the working tax pro can use.
#1
dsocpa  
Posts:
870
Joined:
5-May-2014 11:15am
Location:
Maryland
Not sure if I'm being too picky. New client provides me a K-1 from an LLC with 3 members. A small loss in box 1 some royalties and distributions. The K-1 was all that I received, no attachments, nor was box L regarding capital account information completed. I requested appropriate attachments and informed the client that section L regarding his capital account was blank. He told me all income was passive and the LLC hardly made any money and no capital. He mentioned he'd never been asked for that information. Since I always request the prior 3 years tax returns from new clients once he gave those to me I saw the preparer (HRB) recorded the loss amount from the initial year K-1 and provided a beginning basis amount. That was the year the LLC was organized. I'm thinking how would HRB know what to put as starting basis unless the client provided the information?
 

#2
KoiCPA  
Posts:
768
Joined:
8-May-2023 1:30pm
Location:
Washington
They might have just guessed or been wrong.

I once called an actual CPA about a situation with a clearly wrong partner basis worksheet and was told "That's what the software put there!" as if no one could be expected to review it or understand how it got there.
 

#3
dsocpa  
Posts:
870
Joined:
5-May-2014 11:15am
Location:
Maryland
Instead of the dog ate my homework now it's the software..
 


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