Box 13 · code V
K-1 box 13 code V: a basis adjustment that reads like a loss
This is the letter most likely to be entered as a loss by someone moving quickly. It is a basis item, it is frequently negative, and a negative basis adjustment is not money the partner lost.
The wording on the form is: Section 743(b) negative income adjustments. Read against the year printed in the K-1 header, because the letters are reassigned between years.
Where the letter goes
The partner's own outside basis computation — not a deduction line on the return, and not an income line either.
A section 743(b) adjustment exists to give a transferee partner the right share of inside basis. It moves basis; it does not create a deduction that a form has a line for.
What has to be true before any of it can be claimed
- The partner acquired the interest by transfer rather than by contribution. A 743(b) adjustment belongs to a transferee, which is why it appears on some K-1s and never on others.
- The figure is read with its sign. A parenthesised amount reduces basis; typing it as a positive reduces nothing and silently inflates the partner's basis.
- The partner's basis schedule exists and is current. The adjustment is only meaningful applied to an opening basis that is itself correct.
What the statement has to show
V usually prints an amount rather than STMT. The statement that matters is not the K-1's attachment but the partner's own basis rollforward, which is why this letter is a data-entry problem more often than a reading problem.
What goes wrong, and the shape of it
- A parenthesised V entered as a positive. The most common failure on this letter. Basis is overstated by twice the adjustment, and nothing on the return reports it, because basis is not a line item anywhere.
- V entered on a deduction line. It is not a deduction. A basis adjustment that lands in a deduction column produces a return that both overstates basis and understates income.
- V read as code U. U and V sit next to each other in box 13 discussions and mean different things. One letter apart is the whole difference.
What the reading step does here, and what it does not
K1 FastTax reads the letter, keeps the printed sign, and records the page. It does not maintain the partner's basis schedule and does not decide whether the adjustment is applied correctly.
The rest of box 13 is in the full box 13 code list , and the printed wording of the box itself is on the box 13 page . This page describes where a code goes; it is not tax advice, and the Partner's Instructions for the year on your K-1 are the authority.
Plain answers
Questions about box 13 code V
What is K-1 box 13 code V?
Section 743(b) negative income adjustments. It is the partner's share of a basis adjustment made when a partnership interest changes hands. It belongs in the partner's outside basis computation rather than on a deduction line of the return.
Why is my code V amount in parentheses?
Because it is a negative adjustment, and a negative adjustment reduces the partner's basis. The parentheses are the sign, not a formatting choice — entering the figure as a positive changes the basis computation by twice the amount.
Is a negative 743(b) adjustment a loss I can deduct?
No. It is a basis item. Deducting it as a loss double-counts an adjustment that already works through basis, and it is not visible as an error on any line of the return.
Does every K-1 have a code V?
No. A 743(b) adjustment belongs to a transferee partner — someone who acquired the interest rather than contributing it. An original partner's K-1 will normally show no V at all.
Read box 13 code V from your own K-1
K1 FastTax keeps the letter, the amount and the page together, keeps a statement reference as STMT rather than zero, and records which rows a person checked.