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 (Updated for Tax Year 2023)
To input Optional Basis Section 743(b) / 734(b) adjustments line 10b and 10c:
- Go to OS-3 - Additional Other Information.
- In box 40 - Name of Transferee, verify information has been entered.
- In box 41 - Code, verify the correct code has been selected.
- In box 42 - Amount, verify the amount has been entered.
- Positive 743(b) numbers appear on Schedule B line 10b, left amount field.
- Negative 743(b) numbers appear on Schedule B line 10b, right amount field.
- Positive 734(b) numbers appear on Schedule B line 10c, left amount field.
- Negative 734(b) numbers appear on Schedule B line 10c, right amount field.
- Each Optional Basis Adjustment entry will be itemized in a statement.
- In box 43 - Identification Number, verify the identification number has been entered.
- In box 52 - Property Class, input a description.
- In box 53-55 - Partnership Properties to Which Adjustment has been Allocated, input applicable property description(s).
- In box 64 - Computation of the Adjustment (open text box), input applicable information for Sch B, line 10b/c statement requested.
- Calculate the return.
To input Substantial Basis Section 743(b) adjustments line 10d:
- Go to OS-3 - Additional Other Information.
- In box 81- Name of Transferee, verify information has been entered.
- In box 82 - Code, verify the correct code has been selected.
- In box 83 - Amount, verify the amount has been entered.
- Net positive and negative 743(b) / 734(b) numbers are reported on Schedule B line 10d.
- Each Substantial Basis Adjustment entry will be itemized in a statement.
- In box 84- Identification Number, verify the identification number has been entered.
- In box 93 - Property Class, input a description.
- In box 94-96 - Partnership Properties to Which Adjustment has been Allocated, input applicable property description(s).
- In box 105 - Computation of the Adjustment (open text box), input applicable information for Sch B, line 10d statement requested.
- Calculate the return.
Notes
- Tax year 2022 and prior Optional Basis adjustments 10b: OS-3, boxes 40,41, 42 (positive and/or negative) and 43.
- Tax year 2022 and prior Substantial Basis adjustments 10c: OS-3, boxes 70, 71, 72 (positive and/or negative), and 73.
Inputs which flow to Form 1065 Schedule K and partner K-1s
Method 1: Asset Detail
- Go to Interview form DP-1.
- In boxes 31-99, input applicable asset characteristic information.
- 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).
- Go to Interview form K-5.
- In box 30 - Ratio ID Number, input the unique Ratio ID number used on DP-1 for specific depreciable assets.
- In box 50 - Depr./Amort Code, select F4 lookup value option 4 - Section 743(b) Dpr./Amort.
- Calculate the return.
Method 2: Total Override:
- Go to Interview Form K-11A.
- In box 140 - Section 743(b) positive adjustments - override (5922), input applicable override.
- In box 141 - Section 743(b) negative adjustments - override (5215), input applicable override.
- Calculate the return.
Notes:
- If 1065 Schedule B lines 10b, 10c, 10d are answered No, then the statement listing the 743(b) optional or substantial adjustments will not be prepared.
- OS-3, boxes 34, 35, and 80.
- If a 743(b) asset is entered on DP-1, then Schedule K-1 box 20 Other Information will report a statement:
- Tax year 2021 forward: Code U "Section 743(b) Basis Adjustment" will be created on Line 20U.
- Tax year 2020: Code AH "Section 743(b) Basis Adjustment" will be created on Line 20AH.
- Method 2, step 3 suppresses Schedule K-1, line 20 code U statement prepared from DP1 input.
Additional Information
Solution Id | 000183472/000183472 |
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