Question

Equity interest in LLC was made as of 12/31. How can I access the "Other Increases/Decreases" under Letter L to reflect the transfer of the internal capital accounts?

Forum|Forum|5 years ago
February 24, 2021
1 reply
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The equity interest was an internal gift between members on an LLC. Don't know how to adjust capital accounts to show activity

TurboTax Online

A

Anonymous_

Employee

You need to check the box on your 1065 in Forms Mode (see screenshot).

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K

kskrout-icloud-cAuthor

I had already checked that box, as I began the return, as I always do a complete tie out for all members in this very small LLC. But even with the smart worksheet box checked, I can't figure out how to put the adjustments in, so that the roll forward of equity works for each member. Any other advice?

A

Anonymous_

Employee

The following is the data source for this line:

L Other increase (decrease)
This item consists of:
A. Other increases (Form 1065, page 5, Schedule M-2, line 4), less
B. Other decreases (Form 1065, page 5, Schedule M-2, line 7).

On the Partnership Information Worksheet, the program provides two choices for calculating this item:

1. Sum the individual line items on each partner's Schedule M-2:
This method computes the current year increase or decrease for each partner by adding up the individual items which have actually been distributed to that partner. Allocations are made according to the rounding option chosen on the Partnership Information Worksheet and take into consideration any special allocations.

2. Multiply total partnership amounts by each partner's K-1 allocation percentage:
This method computes the current year increase or decrease for each partner by multiplying the sum of all applicable partnership amounts by that partner's K-1 allocation percentage (profit, loss, or ownership as designated on the Partnership Information Worksheet). However, any partnership amounts that are specially allocated to a partner are allocated to that specific partner according to the special allocation, and any remaining partnership amounts that are not specially allocated are multiplied by each partner's K-1 allocation percentage to calculate the current year increase or decrease.

Print the detail of Item L, Current year increase (decrease), on each partner's Schedule K-1
This feature is optional. Check the box on the Partnership Information Worksheet to display and print a detailed computation of Item L, Current year increase (decrease), in the Supplemental Information section at the bottom of each Schedule K-1. You may want to choose to display/print the detail for the tax return review process, then later uncheck the box when printing the final version of the return.