![]() ![]() ![]() This represents a significant change from past practice, as K-1’s have historically reported capital on Generally Accepted Accounting Principles (GAAP) basis, Section 704(b) basis, or other basis instead of tax capital basis. The most significant change introduced in 2019 is the requirement to show the partner / members’ tax capital basis on the face of the K-1s. While some of these changes are in response to the massive tax overhaul resulting from the 2017 Tax Cuts and Jobs Act (TCJA), most of these changes represent a long-term and ongoing plan by the IRS to enhance transparency in tax reporting. While the IRS has delayed some of the changes from taking effect until 2020, partnerships and tax professionals should prepare now for the changes taking affect in both 20. The Internal Revenue Service (IRS) has made a series of changes to the partnership Schedule K-1 (K-1) for the 2019 tax year, which will result in significantly enhanced disclosures by partnerships, including limited liability companies (LLC) since they are generally regarded as partnerships by the IRS. ![]()
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