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In our forum bio we have been asked to indicate our resident state. So why not add a field to indicate the software we are using? Too many times I see answers that do not seem to fit with ATX that I am using.

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Safe link: https://www.irs.gov/businesses/small-businesses-self-employed/webinars-for-tax-practitioners

IRS partnership rules say property and capital accounts are recorded at FMV. However, the contributing partner has a basis in the partnership equal to his basis in the contributed asset, that is also the basis of the asset in the hands of the partnership. As a result, you have tax vs book differences that are accounted for under section 704(c) in order to allocate the built in gain to the contributing partner and depreciation to non contributing partner. However, in your situation there is really no issue since both husband and wife made an equal contribution. The classic 704(c) situation is where partner A contributes cash and partner B contributes appreciated or depreciated property. By the way, welcome to the forum Casper.

It is a little different, everything gets entered into worksheets, but I found that within just a little while I was moving as fast if not faster than ATX. There was a few times I couldn't find where I needed to input something, but a quick google usually solved that problem. I was like you, very concerned about the difference, but with all the new changes to the tax return, I chose now to make the switch, and I am not disappointed at all. Also there are several users here on this board that are quick to respond for help! And should none of us be able to help, a quick call to Drake will get you up and going. The support is fantastic, geared to our busy schedules.

I would do the work around you suggested, entering the amount on Schedule C and then deducting it with an explanation on p. 2. Yes, of course, your client can ask the issuer to amend the 1099-K, and that would have been a really great thing to do seven months ago. I would do what is expedient for me, and call it a day, as my friend Abby says. Some would say just don't address it on the personal return, let the client get the letter, have a light stroke, (or get mad at you - they do that) and then charge client to explain to IRS what happened. I really can't charge enough to like fixing these things, and the "fix" is going to be saying exactly what you're saying now. Additionally, three weeks after you respond to the letter, the client is going to trot back in there with the letter that says, "We got [one of these six things] from you, and we need two months to let it lay around but we'll get back to you. That's your fault, too. /s