I have a client with a minority partnership interest who recently received a K1 copy for 2020 where his partner capital account was zeroed out. He asked the CFO's attorney why this was and they explained the capital accounts were adjusted to a zero balance due to an IRC 743B basis adjustment(this was noted in k-1 so the answer seemed ambiguous, perhaps intentionally so). There was no sale made of his interest and there was no further elaboration as to why?
I wonder if a. the k1 should have used a 734B reference in its annotation for some form of depreciation, commercial real estate entity as sole asset of partnership, or if this is something technical that is beyond me. Thoughts? Or suggestions as to how I should inquire for elaboration? My client has a cantankerous relationship with his partners, just fyi. The less I sound like a moron in retort the better.
Thank you kindly,
Leviathan