Overview › Area
K-1s & basis
Woodworks S corporation (basis gaps) and the Ridgeline fund (late K-1).
Preparer Priya Raman · due 2026-03-27
Reviewer Daniel Ortiz · due 2026-04-08
Partner Helen Strand
Time 0 of 2.0 h budget
Erik owns 20% of Lindqvist Family Woodworks (S corporation, Oregon; he does not work in it — passive). 2025 K-1: income 18,400, interest 85, distributions 42,000 (including 1,580 Oregon composite tax paid for him).
Distributions exceeded his stock basis 20,785, so 21,215 is long-term capital gain. The basis only became computable when Erik found the 2023 K-1 in his mother's papers (D40, 06/05/2026) — the prior preparer never had it.
The Ridgeline Real Estate Fund III K-1 arrived on 06/22/2026 (the reason for the extension): rental income 8,400, interest 120, long-term gain 1,350, foreign tax 210 (in 396). 22% of its rental income is California-source.
K-1 lines → return
| K-1 | Box | Amount | Lands on |
|---|---|---|---|
| Woodworks D39 | 1 ordinary income | 18,400 | SchE.28A |
| Woodworks D39 | 4 interest | 85 | SchB.1.7 |
| Woodworks D39 | 16D distributions | 42,000 | F7203.6 |
| Woodworks D39 | 17V QBI / W-2 wages / UBIA | 18,400 | F8995.2.2 |
| Woodworks D39 | Oregon composite tax | 1,580 | ScheduleS.credit |
| Ridgeline D37 | Box 2 net rental real estate income | 8,400 | SchE.28B |
| Ridgeline D37 | Box 5 interest income | 120 | SchB.1.8 |
| Ridgeline D37 | Box 9a net long-term capital gain | 1,350 | SchD.12 |
| Ridgeline D37 | Box 19A distributions | 6,000 | |
| Ridgeline D37 | Box 21 foreign taxes paid | 210 | Sch3.1 |
| Ridgeline D37 | Beginning capital account | 60,000 | |
| Ridgeline D37 | Ending capital account | 63,660 |
Basis by year
| Year | Woodworks stock basis | Source |
|---|---|---|
| 2022 | 21,300 (ending) | client worksheet in prior preparer file — never seen by us |
| 2023 | 21,300 + 14,100 − 20,000 = 15,400 | 2023 K-1 (D40) — found 06/2026 |
| 2024 | 15,400 + 16,900 − 30,000 = 2,300 | 2024 K-1 on the prior return |
| 2025 | 2,300 + 18,485 − 42,000 → 0, excess 21,215 | 2025 K-1 (D39) |
Ridgeline capital account: 2024 ending 60,000 → 2025 ending 63,660 (D37). Outside basis was never computed by anyone — open for next year.
Checks that don't trust the engine (2)
SCORP-BASIS · K-1s & basis
Woodworks stock basis rolled forward independently
judgmentAgrees
Beginning 2025 basis 2,300; distributions exceed basis by 21,215 (long-term gain). Still resting on a 2022 client worksheet nobody has seen - obtain 2019-2022 K-1s or the corporation's basis schedule. Distributions include Oregon composite tax 1,580 paid April 2026.
Engine 2,300 · recomputed 2,300
How: 2022 ending 21,300 (client worksheet) + 2023 K-1 (D40) 14,100 - 20,000 = 15,400; 2024 +16,900 - 30,000 = 2,300; 2025 + 18,485 - 42,000.
Authority: IRC 1366, 1367, 1368(b)
K1-RECEIVED · K-1s & basis
Every expected K-1 received and mapped
Agrees
Woodworks box 1 18,400 -> SchE.28A; Ridgeline box 2 8,400 -> SchE.28B, box 5 120 -> SchB, box 9a 1,350 -> SchD.12, box 21 foreign tax 210 -> Sch3.1. Ridgeline arrived 2026-06-22 (extension).
How: 2024 return reported two K-1s; matched each 2025 K-1 box to a return line.
Documents (4)
| D37 | 2025 Schedule K-1 (Form 1065) - Ridgeline Real Estate Fund III LP
received 2026-06-22 · client · extracted |
landed on the return | Sch3.1, SchB.1.8, SchD.12, SchE.28B | |
| D38 | Ridgeline Real Estate Fund III - 2025 state supplement
received 2026-06-22 · client · extracted |
landed on the return | SchCA540NR.17.B, SchCA540NR.17.E | |
| D39 | 2025 Schedule K-1 (Form 1120-S) - Lindqvist Family Woodworks, Inc.
received 2026-03-01 · client · extracted |
landed on the return | F7203.3a, F7203.3c, F7203.6, F8995.2.2 +3 | |
| D40 | 2023 Schedule K-1 (Form 1120-S) - Lindqvist Family Woodworks, Inc.
received 2026-06-05 · client · extracted |
landed on the return | F7203.1 |
Every line in this area (17)
Show all 17 lines
| F7203.1 | Stock basis at beginning of year | 2,300 | |
| F7203.3a | Ordinary business income | 18,400 | |
| F7203.3c | Interest income | 85 | |
| F7203.4 | Total increases | 18,485 | |
| F7203.5 | Stock basis before distributions | 20,785 | |
| F7203.6 | Distributions | 42,000 | |
| F7203.7 | Stock basis after distributions | 0 | |
| F7203.15 | Ending stock basis | 0 | |
| F7203.excess | Distributions in excess of basis (capital gain) | 21,215 | |
| F8949.F.SCORP | Lindqvist Family Woodworks, Inc. - distributions in excess of stock basis (acquired 2018-12-20, sold 2025-12-31; proceeds 21,215.00, basis 0.00) | 21,215 | |
| F8949.F.total | Box F totals (proceeds 21,215.00; basis 0.00; adjustments 0.00) | 21,215 | |
| SchD.12 | Net long-term gain from partnerships and S corporations | 1,350 | |
| SchE.28A | Lindqvist Family Woodworks, Inc. (S corporation) - passive income | 18,400 | |
| SchE.28B | Ridgeline Real Estate Fund III LP - passive rental income | 8,400 | |
| SchE.32 | Total partnership and S corporation income | 26,800 | |
| SchE.41 | Total income or (loss) | -11,830 | |
| Sch1.5 | Rental real estate, partnerships, S corporations (Schedule E) | -11,830 |
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reviewer
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partner
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