REPORTING OF PARTNERS CAPITAL

[Lee B]

Copied from Accounting Today:

The Internal Revenue Service issued a notice Monday delaying a requirement for reporting partners’ share of partnership capital.

Notice 2019-66 provides that the requirement to report partners’ shares of partnership capital on the tax basis method will not be effective for 2019 (for partnership taxable years beginning in calendar 2019) but will be effective starting in 2020 (for partnership taxable years that start on or after Jan. 1, 2020).

For this year, partnerships and other persons must report partner capital accounts consistent with the reporting requirements in the 2018 forms and instructions, including the requirement to report negative tax basis capital accounts on a partner-by-partner basis.

The notice also clarifies the 2019 requirement for partnerships and other persons to report a partner’s share of net unrecognized Section 704(c) gain or loss by defining this term for purposes of the reporting requirement. In addition, the notice exempts publicly traded partnerships from the requirement to report their partners’ shares of net unrecognized Section 704(c) gain or loss until further notice