Partners' capital accounts must be determined using the same method on Form 1065 Schedule L, Form 1065 Schedule M-2, and the Schedules K-1 prepared for the partners.

Question

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The IRS allows different methods for reporting partners' capital accounts on Form 1065 Schedule L, Schedule M-2, and Schedules K-1, such as tax basis, GAAP, or section 704(b) book basis.

Partners' Capital Accounts Must Be Determined Using the Same Method