How do I input Section 743(b) Adjustments in a 1065 return using interview forms in CCH® ProSystem fx® Tax?

Inputs which flow to 1065 Schedule B

To input Optional Basis adjustments:

  1. Go to OS-3 - Additional Other Information.
  2. In Box 40 - Optional Basis Computation and Allocation Adjustment, verify information has been entered.
  3. In Box 41 - Code, verify the correct code has been selected.
  4. In Box 42 - Amount, verify the amount has been entered.
    • Positive 743(b) numbers appear on Schedule B line 10b.
    • Negative 743(b) numbers appear on Schedule B line 10b.
  5. In Box 43 - Identification Number, verify the identification number has been entered.
  6. Calculate the return.

To input Substantial Basis adjustments:

  1. In Box 70 - Substantial Basis Computation and Allocation Adjustment, verify information has been entered.
  2. In Box 71 - Code, verify the correct code has been selected.
  3. In Box 72 - Amount, verify the amount has been entered.
    • Positive 743(b) numbers appear on Schedule B line 10c.
    • Negative 743(b) numbers appear on Schedule B line 10c.
  4. In Box 73 - Identification Number, verify the identification number has been entered.

Inputs which flow to Form 1065 Schedule K and partner K-1s

Method 1: Asset Detail

  1. Go to Interview form DP-1.
  2. In Boxes 31-99, input applicable asset characteristic information.
  3. In Boxes 180-212 - Ratio ID for special allocation or 754 - 1065 only, input a unique number for specific assets to be treated as 743(b).
  4. Go to Interview form K-5.
  5. In Box 30 - Ratio ID Number, input the unique Ratio ID number used on DP-1 for specific depreciable assets.
  6. In Box 50 - Depr./Amort Code, select F4 lookup value option 4 - Section 743(b) Dpr./Amort.
  7. Calculate the return.

Method 2: Total Override:

  1. Go to Interview Form K-11A.
  2. In Box 140 - Section 743(b) positive adjustments - override (5922), input applicable override.
  3. In Box 141 - Section 743(b) negative adjustments - override (5215), input applicable override.
  4. Calculate the return.
Notes:  
  • If 1065 Schedule B lines 10b or 10c are answered No, then the statement listing the 743(b) optional or substantial adjustments will not be prepared.
  • If the asset is entered on DP-1, then the statement "Other Information, Box 20, Code AH Section 743(b) Basis Adjustment" will be created on Sch K-1, Line 20AH
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