How do I enter information from a Grantor Letter?

[DorothyJ]

@Hiker23  & @rwrosche   I spent the morning experimenting with using two K1s, a trust & a partnership.  After each attempt, I go & look at the Forms to see how they've been populated & so far I've had no luck in pushing those numbers into the slots that the Grantor Letter indicates they should go to.  The trust part is pretty straightforward, but partnership entries have me confused.

[Hiker23]

Hi DorothyJ, @DorothyJ 

I am wondering... since the amounts coming from Hines Global REIT Properties, LP are losses, maybe the amounts don't flow through to the forms because of the passive activity loss limitations.  I think unless you are an active participant in the real estate activities that you can't take the loss until you dispose of the activity associated with it.  My understanding is that HGR Liquidating Trust has not been fully liquidated as of Dec 31, 2020 so I'm thinking the loss may be a carryover until the trust is fully liquidated.

Any thoughts?

[Wherman396]

Spoke with Hines customer support and the agent was able to figure out , with TurboTax, what needs to be entered.  So, first create a K-1 Estate or Trust ( USE EASY STEP in TurboTax) with the Hines Liqudating Trust name, EIN and address.

( if you don't see information posted you need to hit continue to go to the next screen)

Select: Domestic Beneficiary.

Select: My K-1 uses Calendar Year

Select: Is this a Final K-1. NO

Select Boxes 1-5, 6-9 and 14

Enter: Box 1, Interest from Grantor Letter

Enter: Box 3, 0

Enter: Box 4a Business Property Gain or Loss from Grantor letter

Enter: Box 4c: Unrecaptured Section 1250 Gain from grantor letter

Select: Rental Real Estate

Select: NO - Are you a Real Estate Pro?

Select: NO - Participate in this Activity?

Enter: Box 7 - Partnership Income from Passive Activities from Grantor Letter

Select: code I - Section 199A info and enter Section 199A QBI from Grantor Letter

Pass the next 2 screens

Select: Yes - we see you have section 199A income

Enter: Business Name, and EIN ( Hines global Reit, etc )

Select: Hines Global Reit has UBIA

Enter: amount of UBIA from Grantor Letter

Enter: none of these apply

Enter No

Good Luck

[DorothyJ]

@Wherman396 Woo hoo!  Good for you reaching out to Hines.  This is pretty much what I did yesterday except I didn't use Boxes 6-9 in the Trust K1.  I have a meeting now, but I'll try this later & see what gets populated.

[DorothyJ]

@Hiker23 I think you're right about the zero amounts & also about the fact that this is very much a carryover situation as the HGR Trust hasn't been fully disposed.  That's why I'd like to get everything in its proper place so when we have to deal with it next year, things will go more smoothly, (we hope).

[Hiker23]

@Wherman396,

This is great, just what I was hoping for.  I will give it a try.  Thanks so much for sharing!

Hiker23

[rwrosche]

Thank You. 

This is great.

[GarryR]

This is excellent, thank you.   One more question.  Does Qualified refer to whether the REIT was in a Tax Deferred account (IRA), or does it refer to Qualified as a REIT?  My Hines REIT is in a non-qualified account, so do I need to input the QBI?  Also, right after Box 7, box 9 shows up asking if it is Depreciation, Depletion, or Amortization.  Do I skip this part?    Again, thank you.  

[DorothyJ]

@Wherman396  I get an error message when I put the QBI number in next to the Code I entry: "Box 14 Code I has been selected but no Section 199A Income has been entered on Statement A."

This error message goes away if I put that QBI number on the same entry page as UBIA, that is, on the page AFTER you enter the Hines Global REIT info.  I checked the 'Hines Global REIT has business income' box & put it in Ordinary Business Income (although maybe it should be Rental Income??).  It makes sense since the QBI and the UBIA both apply to the REIT.

[DorothyJ]

@GarryR I'm no expert, but I believe that in this case 'Qualified' refers not to your account, but to the nature of the income they're showing.  So yes, you need to put it in.

And yes, I skipped Box 9 with the Depreciation, Depletion, or Amortization....

[Wherman396]

I too had an issue at first selecting I - Section 199A Information. I played with it for a while and put in a lower case i and it seemed to accept it.

Also, for the individual asking about qualified account, I have a non-qualified account ( Non-IRA, etc) and the information I entered reflects that. I think you are asking if QBI refers to an IRA ( as in Qualified ), in this case no. You need to include the QBI information.  ( BTW, I am not an accountant, that is how I dealt with it, and I believe I am correct)

Good Luck

[Wherman396]

As a general question, I noticed that my long term capital gains increased, however there were no benefit to the rest of the negative data.  Did you all find the same result?

Thanks

[jimsclark]

I followed your instructions and did the correction you mentioned later. When I look up the forms looking for the qualified Business Income information that I put in for the Section 199 UBIA the amount that is suppose to show up in Schedule E form 1040 Part 2 is not there.  

Like someone said this is trust that hasn't been distributed so maybe it's suppose to be zero or come up blank but the only place I can see the number I input in in the K1 section where I filled it out its not in the forms or at least where I think it should be. 

[Jacker]

Thanks for all the trouble you're going to. After following the instructions you pulled together, I am still seeing some inconsistencies. I expected to see a form 4797 generated with input  in Part I, column G. Schedule E is there but nothing in Part II but zeros and same with Part III. Would have thought the name on Schedule E would have been the REIT but showed the Trust. Form 8995 does show the REIT  but shows 0 for the QBI. I sure don't know what I'm doing wrong....

[Wherman396]

I just checked my Return, and concede that the data I may have provided could be faulty as per noted in the previous message thread.  

Another piece of information that Hines Customer service told me is that there are many complaints in reference to the Grantor letter and entering that Data in TurboTax.  Hines is supposedly working on "instructions" to help resolve our issues, however, there was no commitment as to when and if it will be ready in time.

I am going to call daily, for the next few days, and complain about the situation.  I respectfully suggest that all those affected by this also lodge a complaint and perhaps it will speed those instructions along.