Question

Go online and search for an accounting related news article that is dated no earlier than six months from today and provide a brief summary (minimum one paragraph with a minimum of five sentences) in your own words of the news article along with the proper citations as to where you obtained the article. For your reference citation, please provide (1) the title of the article, (2) the author of the article, (3) the publication where the article is published, and (4) the publication date of the article.

Answer 1

Title of the Article : Draft instructions for partnership capital account reporting released.

Author: Sally P. Schreiber

Publication: Journal of Accountancy

Date of Publication: 23rd October 2020

On 22nd October, Thursday, early draft of instruction to Form 1065, U.S. Return of Partnership Income was released. It will be applicable to 2020 TAX year. It must calculate partner capital accounts using the transactional approach for the tax-basis method. Under the tax-basis method, partnerships report partner contributions, the partner’s share of partnership net income or loss, withdrawals and distributions, and other increases or decreases using tax-basis principles as opposed to reporting using other methods such as GAAP. To promote compliance with the tax-basis method, the IRS intends to grant penalty relief for the transition to the new rules in 2020. the IRS will not assess a penalty for any errors in reporting a partnership’s partners’ beginning capital account balances on Schedules K-1 if the partnership takes ordinary and prudent business care in following the form instructions to calculate and report the beginning capital account balances.