I am preparing a tax return for a corporation that has an investment in an entity that generates Schedule K-1 (Form 1065). There is a number on line 15, code M, which is the credit for researching activities. I have three questions:
1) As I am tracking the tax basis, does the credit reduce the corporation's tax basis in the entity?
2) Should the credit be an M-1 adjustment on the corporation's tax return?
3) The tax return is being filed late. Any impact on the credit carryover? (this is the first year, and the corporation has a loss).
Thanks!