Tax Warrior Chronicles

New Partnership Tax Capital Reporting May Prove Problematic

Posted on Mon, Nov 23, 2020

By: Chris Catarino, CPA, MT and Joseph Criscuolo, CPA, MT

 

On October 22, 2020, the IRS released draft instructions to Form 1065, U.S. Return of Partnership Income, for the 2020 tax year. The draft instructions provide additional clarity on the new tax capital reporting requirements partnerships will face this upcoming filing season. Partnerships that have not previously tracked partners' tax capital accounts, especially older partnerships, will face significant challenges complying with these new rules.

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