1065 Schedule M-2

Forum|Forum|3 years ago
January 29, 2023
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Using TT Business for our 2022 partnership return. In 2022 we sold an asset that had a full 179 deduction from a prior year. This asset was already in TT, and the sale was then entered in the step-by-step section. The sale then appeared in the schedule M-1 income reconciliation and flowed to the K-1 as expected. However, it seems there should also be a corresponding increase to the capital accounts in schedule M-2. After all, the business turned a fully depreciated asset with zero book value into cash. Am I missing something? Should I just enter the sale proceeds on M-2 line 4 manually?

TurboTax Business Windows

Anonymous_

Employee

I don't think so, but I have a test return where the figures are actually all correct on the balance sheet in this scenario.

I will page @Rick19744 and believe he will provide input soon.

diversionAuthor

There may be a problem with the K-1 as well. The asset sale is summarized in the Partner's Disposition Report attached to the K-1, but line 20 (L) on the K-1 does not show the asset sale amount; there is no value shown there.

Anonymous_

Employee

@diversion wrote:

The asset sale is summarized in the Partner's Disposition Report attached to the K-1, but line 20 (L) on the K-1 does not show the asset sale amount; there is no value shown there.

Only the Code (L) and STMT will be shown on Line 20. The other information will be shown on the K-1 179 report.