K-1 Reporting of Partnership Basis: Some Penalty Relief

For partnership returns (Form 1065) filed for the 2020 tax year, partners’ basis must be reported on their Schedule K-1s using a tax basis method; other methods are no longer permitted. Tax basis method uses a transactional approach, which factors in partner contributions, distributive shares of income, distributions, and certain other adjustments. However, the IRS said it would not impose accuracy-related penalties on partnerships for incorrection information this year. #IdeaoftheDay

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