Capital Account ReportingPublic Service Bulletin
March 10, 2022
Purpose of bulletin
The purpose of this Public Service Bulletin is to provide details regarding the recently issued FTB Notice 2022-01.
Starting in taxable year 2022, and all subsequent years, partnerships and limited liability companies taxed as partnerships will be required to use the California tax basis amounts in the "Capital Account Analysis" on Schedule K-1 (565) and Schedule K-1 (568).
For taxable year 2021, Franchise Tax Board has issued Notice 2022-01 which allows partnerships and limited liability companies taxed as partnerships to report the "Capital Account Analysis" using either California tax basis amounts or federal tax basis amounts.
The option to use the federal tax basis amounts is limited solely to the “Capital Account Analysis” on Schedule K-1 (565) and Schedule K-1 (568) for the taxable year 2021, and does not allow any taxpayer to use their federal tax basis amounts instead of their California tax basis amounts for any other purpose, including reporting or determining their California tax liability.
For more information please see Notice 2022-01.