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Hi
I am new to this group, I just recently went to a seminar on Shareholder/Partner Basis and not sure how to handle this situation for a client. They are a partnership with 4 partners. I have been keeping track of their basis on a separate basis schedule , not in my tax program. On that separate basis schedule I have not been including their recourse debt, because I know in later years it will create negative basis and they will owe tax on this money... Now the Basis schedules are getting attached to the tax returns and IRS has them on file .... I was informed at this seminar that the partners are required to use the debt basis and take losses as incurred, and then in later years pay the tax. Not sure how to handle now since they have not taken previous years losses and had debt basis. Any advice would be helpful.. thanks
I am new to this group, I just recently went to a seminar on Shareholder/Partner Basis and not sure how to handle this situation for a client. They are a partnership with 4 partners. I have been keeping track of their basis on a separate basis schedule , not in my tax program. On that separate basis schedule I have not been including their recourse debt, because I know in later years it will create negative basis and they will owe tax on this money... Now the Basis schedules are getting attached to the tax returns and IRS has them on file .... I was informed at this seminar that the partners are required to use the debt basis and take losses as incurred, and then in later years pay the tax. Not sure how to handle now since they have not taken previous years losses and had debt basis. Any advice would be helpful.. thanks