Calculating Partnership Capital Accounts for 2020 (CPCA)

Robert C. Lickwar, CPA, Edward A. Renn, Esq., Ian J. Redpath, J.D., LL.M., Michael J. Tucker, J.D., CPA
  • 3
  • Intermediate
  • Taxes

Individual course: $94
Best Value: All-Star Tax Season Pass
Volume Discounts: 
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Many tax practitioners with partnership clients are responsible for presenting partner capital accounts on the tax basis for the first time on 2020 partner income tax returns. But what does this mean compared to prior year rules regarding partner capital accounts? This program covers how 2020 rules regarding the presentation of partner capital accounts differ from preceding years. For tax practitioners preparing 2020 partnership Form 1065, the course explains these complex new rules in practical and understandable terms.

Major Topics:

  • How a partner’s outside basis and capital account differ
  • Reconciling Schedule M-2 Form 1065 with Partnership K-1 Schedule L
  • IRS requirement to report partner tax basis on the transactional approach
  • How to compute a partner’s initial tax capital account for 2020
  • Implications if a capital account is negative
  • Deficit restoration accounts and qualified income offsets
  • Modified outside basis method and modified previously taxed capital method
  • Determining a partner’s beginning capital account for 2020 for a partnership that did not use the tax basis method in 2019
  • Beginning capital account for partnerships and partners already reporting on the tax basis

Learning Objectives

Understand how a partner determines and reports his or her tax basis capital account for 2020

Any tax practitioner who will be preparing partnership income tax returns for 2020

Basic understanding of tax rules relating to partnerships and partners




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