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Month: February 2019

1065 Schedule K-1 Change

The instructions for the 2018 version of Form 1065, U.S. Return of Partnership Income, contain a new requirement that has not been widely publicized.  The change appears on page 30 of the instructions and relates to the capital account analysis (item L) on Schedule K-1. According to the instructions, if a partnership reports the capital account analysis using any basis other than the tax basi...

199A and Section 179

Tax preparation software for entity tax returns must compute qualified business income for the purpose of the §199A deduction to be included in the other information box of Schedules K-1.  (If an entity prepares Schedules K-1 without including §199A details in the other information box, the recipient of the K-1 is precluded from taking the §199A deduction on the recipient’s Form 1040.) M...

199A Reminder for Fiscal-Year Entities

As we discussed in our seminars, when a taxpayer receives a Schedule K-1 from a fiscal-year entity with a year that began prior to January 1, 2018 and ended during 2018, the income (or loss) on the Schedule K-1 is used to compute the taxpayer’s 2018 qualified business income, to the extent that it is otherwise eligible for the qualified business income deduction. However, if the entity that ...

Keeping Client Documents Secure

With the prevalence of identity theft, it is vital that practitioners protect sensitive client data.  Client data is especially vulnerable during tax season, since many clients send data to practitioners using unsecure means. An email attachment that is not encrypted with a password is extremely vulnerable to interception by identity thieves.  Since many clients do not think about the need f...