swaitsandClaude Opus 5.5
0495726001
check / check (push) Canceled after 0s
Split kernel::entry_flows into entry_movements and flows_of so the reversal-mirror proof fits CI; prove runs the fast harnesses, prove-slow the 8 slow ones (own job in scheduled CI), prove-all both. Laws in verification.md renumbered 1-31 with a table of all 55 harnesses. MCP docs checked against the 115 tools (about 60 fixes) with a test that every tool is documented; rules.md cross-references fixed; bookspec statuses and loader tightened; viewer notes wrap and accounts sort by code; STATUS.md says P3 is built, cutover pending. Co-Authored-By: Claude Opus 5.5 <noreply@anthropic.com> Claude-Session: https://claude.ai/code/session_01T3gXMVt7XJPi6ens1or9Dj
174 lines
6.0 KiB
TOML
174 lines
6.0 KiB
TOML
# P3 (D-41): the K-1 worksheet reports tax-basis capital beside book capital.
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id = "partnership-k1-tax-basis-capital"
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title = "Schedule K-1 Item L on the tax basis: property contributed at its adjusted basis"
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rule = "Each partner's capital account is reported on the tax basis: capital contributed is cash plus the adjusted tax basis of property contributed; the share of income is as figured for tax; distributions are cash plus the adjusted tax basis of property distributed. Book capital (property at fair market value) differs by the partner's share of the built-in gain or loss at contribution, and by every book-tax difference after; a figure the books cannot know (tax depreciation) is left to the preparer, never guessed."
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status = "AUTHORITY"
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sources = [
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"Instructions for Form 1065 (2025), Item L, Tax-basis method: Capital contributed during the year; Current year net income (loss); Withdrawals and distributions",
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"Instructions for Form 1065 (2020), Item L: 'you must use the tax basis method this year'",
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"26 U.S.C. §723",
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"Treas. Reg. §1.704-3(a)(3)(ii)",
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"DECISION D-41 (owner, 2026-10-20): the K-1 worksheet reports tax-basis capital beside the book figures (wanderbooks plan/served.md; rules.md B-36)",
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]
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tags = ["partnerships", "k1", "tax-basis", "capital"]
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[setup]
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currency = "USD"
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fiscal_year_start = "01-01"
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basis = "accrual"
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rounding = "largest-remainder"
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cash_accounts = ["1000"]
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[[setup.accounts]]
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code = "1000"
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name = "Bank"
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type = "asset"
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[[setup.accounts]]
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code = "1500"
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name = "Equipment"
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type = "asset"
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[[setup.accounts]]
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code = "1510"
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name = "Accumulated Depreciation"
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type = "asset"
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[[setup.accounts]]
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code = "3000"
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name = "Capital, Tobin Harlow"
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type = "equity"
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[[setup.accounts]]
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code = "3001"
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name = "Capital, Morgan Ellis"
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type = "equity"
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[[setup.accounts]]
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code = "4000"
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name = "Sales"
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type = "revenue"
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[[setup.accounts]]
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code = "6200"
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name = "Depreciation Expense"
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type = "expense"
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[[setup.members]]
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name = "Tobin Harlow"
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capital_account = "3000"
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share = "0.5"
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[[setup.members]]
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name = "Morgan Ellis"
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capital_account = "3001"
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share = "0.5"
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# Two devices the members contribute jointly from personal use, 24-month
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# lives: a laptop worth 1,440.00 (adjusted basis 1,688.40) and a camera
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# worth 1,300.00 (adjusted basis 1,080.00).
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[[setup.assets]]
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id = "laptop"
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description = "Laptop"
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cost = "1440.00"
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salvage = "0.00"
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life_months = 24
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in_service = "2026-01-01"
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method = "straight_line"
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cost_account = "1500"
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accumulated_account = "1510"
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expense_account = "6200"
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acquired_by = 2
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basis = { rule = "personal_use_conversion", contributor_adjusted_basis = "1688.40", fmv_at_contribution = "1440.00", sec704c_method = "traditional" }
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[[setup.assets]]
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id = "camera"
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description = "Camera"
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cost = "1300.00"
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salvage = "0.00"
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life_months = 24
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in_service = "2026-01-01"
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method = "straight_line"
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cost_account = "1500"
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accumulated_account = "1510"
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expense_account = "6200"
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acquired_by = 2
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basis = { rule = "personal_use_conversion", contributor_adjusted_basis = "1080.00", fmv_at_contribution = "1300.00", sec704c_method = "traditional" }
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[[events]]
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date = "2026-01-01"
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description = "Cash contributed"
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lines = [
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{ account = "1000", side = "debit", amount = "2000.00" },
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{ account = "3000", side = "credit", amount = "1000.00" },
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{ account = "3001", side = "credit", amount = "1000.00" },
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]
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[[events]]
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date = "2026-01-01"
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description = "Devices contributed jointly, at their values"
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lines = [
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{ account = "1500", side = "debit", amount = "1440.00" },
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{ account = "1500", side = "debit", amount = "1300.00" },
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{ account = "3000", side = "credit", amount = "1370.00" },
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{ account = "3001", side = "credit", amount = "1370.00" },
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]
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[[events]]
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date = "2026-02-01"
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description = "Sale"
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lines = [
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{ account = "1000", side = "debit", amount = "600.00" },
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{ account = "4000", side = "credit", amount = "600.00" },
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]
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# December's runs catch the year up (rules.md B-15): 1,440.00 x 12/24 =
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# 720.00 and 1,300.00 x 12/24 = 650.00, dated Dec 31.
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[[events]]
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run_depreciation = { asset = "laptop", period = "2026-12" }
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[[events]]
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run_depreciation = { asset = "camera", period = "2026-12" }
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[[events]]
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date = "2026-12-15"
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description = "Distributions"
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lines = [
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{ account = "3000", side = "debit", amount = "300.00" },
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{ account = "3001", side = "debit", amount = "300.00" },
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{ account = "1000", side = "credit", amount = "600.00" },
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]
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# Hand check, book, each: 1,000.00 cash + 1,370.00 property + (600.00 -
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# 720.00 - 650.00) / 2 = -385.00 - 300.00 = 1,685.00.
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[[expect]]
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query = "k1"
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from = "2026-01-01"
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to = "2026-12-31"
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values = { "Tobin Harlow.beginning" = "0.00", "Tobin Harlow.contributions_cash" = "1000.00", "Tobin Harlow.contributions_property" = "1370.00", "Tobin Harlow.net_income" = "-385.00", "Tobin Harlow.distributions" = "300.00", "Tobin Harlow.ending" = "1685.00" }
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# Tax, each: property at its §723 basis, (1,688.40 + 1,080.00) / 2 =
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# 1,384.20; income open (tax depreciation is the preparer's), known so far
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# -385.00; ending known so far 1,000.00 + 1,384.20 - 385.00 - 300.00 =
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# 1,699.20.
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[[expect]]
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query = "k1_tax_basis"
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from = "2026-01-01"
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to = "2026-12-31"
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values = { "Tobin Harlow.beginning" = "0.00", "Tobin Harlow.contributions_cash" = "1000.00", "Tobin Harlow.contributions_property" = "1384.20", "Tobin Harlow.net_income" = "open", "Tobin Harlow.known_net_income" = "-385.00", "Tobin Harlow.distributions" = "300.00", "Tobin Harlow.ending" = "open", "Tobin Harlow.known_ending" = "1699.20" }
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# Book less tax: the built-in gain share, ((1,440.00 - 1,688.40) +
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# (1,300.00 - 1,080.00)) / 2 = (-248.40 + 220.00) / 2 = -14.20 =
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# 1,685.00 - 1,699.20.
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[[expect]]
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query = "k1_reconciliation"
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from = "2026-01-01"
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to = "2026-12-31"
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values = { "Tobin Harlow.beginning" = "0.00", "Tobin Harlow.built_in_gain_704c" = "-14.20", "Tobin Harlow.property_without_basis" = "0.00", "Tobin Harlow.property_distributed" = "0.00", "Tobin Harlow.total" = "-14.20" }
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[[expect]]
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query = "k1_tax_basis"
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from = "2026-01-01"
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to = "2026-12-31"
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values = { "Morgan Ellis.contributions_property" = "1384.20", "Morgan Ellis.known_ending" = "1699.20" }
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