Partner's share of adjustments

Technical topics regarding tax preparation.
#1
Joanna  
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5
Joined:
5-Jan-2021 9:41am
Location:
Jacksonville, FL
I have a client who is a passive member in a partnership, received a K-1 with a loss in 2019 (which didn’t affect tax outcome since the loss gets suspended). The partnership return for 2019 was amended and at the end of 2020, the partner received form 8986 with Partner’s share of Adjustments which increases the loss for the passive member.

From what I read, the partner needs to file form 8978 and 8978a with an increase/decrease to tax liability for the year the adjustment form was received, which we would file for tax year 2020. Since there is no increase/decrease to tax liability, do you agree that I should still attach form 8978 to the tax return and just attach the explanation? There is no way to just input a $0 in UT under Taxes, other taxes, form 8978, line 14.
Do you agree with the course of the action?
Do you have experience with the forms and can suggest something else?
 

#2
COGS  
Posts:
256
Joined:
10-Oct-2014 3:57pm
Location:
The south
I am going to follow up on this question because in my humble opinion, we need to expand the knowledge base on this. I found a very nice article here, but I am still totally confused. https://www.crowe.com/insights/tax-news ... 6-now-what

The original post references filing forms 8978. My software, Lacerte, does not have that form. I think.

I have just received the first 8986 I have every seen. It is nice that that I don't need to amend anything. But where do I put the income in?
 


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