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The help line phone number was auto-removed from my reply, so I will try a different way.
Eight Eight Eight, Seven Seven Seven, Three Zero Six Six.
Some of the posters talked about overriding Line 43 of CA Form 540, but doesn't Schedule P and Form 3804-CR also need revising to reflect that the credit can reduce tentative minimum tax (TMT)? I believe yes.
Yes, Schedule P and Form 3804-CR need to be updated by TurboTax so I don't think simply overriding Line 43 on CA From 540 will work. Also, to the extent it is relevant, I believe California also changed the credit ordering rules for 2021 in a way that will impact the other state tax credit. I think there are too many changes for a simple fix and think the best course of action is to wait to file until TurboTax has updated its forms, which probably means needing to file California on extension.
Hi Patricia,
Very much appreciate your ongoing attention on this site. 🙂
The above directions you provided are for an S Corp. Can you provide similar for a partnership form 1065 k-1?
Steps 1-4 would be the same, but Steps 5-6 would differ.
Thank you!
Cam
Here are the steps for both an LLC and a Partnership Form 1065 (they are different forms in California).
LLC:
Partnership:
Patricia,
As always, you came through like a champ!! 😉
Following your instructions for Pship, I did run into the following issues for which I'd like your help.
1) PTE Tax credit calculation error on Form 3804
According to the FTB, the calc of the tax credit amount "...for a partnership this will be the sum of lines 1-11 minus the sum of lines 12 and 13 on the K-1 (565/568)."
However, Form and Wks for 3804 derive item "b", the "Elective tax credit amount", without subtracting line 12 and 13. In my case, several partners have a credit on line13e (for sec 754 depreciation) which is not included on the TT calc. In fact, Form 3804 line "a" reports a total for each partner that reflects "the sum of lines 1-11" from their k-1, but does reflect subtraction of "the sum of lines 12 and 13". :(
2) Form 3804 Wks Error: "First Name must be entered for electronic filing".
One of my partners is a Revocable Trust, entity type "R" on the Sch K-1 Wks. Form 3804 Wks auto-populates the trust name from the k-1 Wks into the "Trust Name" field, leaving First and Last name blank, rendering the above error.
When I enter a First and Last Name, I receive another error, "First Name or Last Name should not be entered for electronic filing, if Trustname is entered." :0 I am unable to remove Trust Name. So, I'm stuck in a circular error loop. :(
Your helpful response and advice is greatly appreciated!
Cam
I am unable to reproduce the experiences you described. Sometimes these items can be resolved by manually updating the software (TurboTax Business menu >> Online >> Check for Updates).
Here are my test results:
1) Adding Section 754 Depreciation to Form 1065 p405 Line 13(d)C, Code W, adds an amount to Line 13 of the Federal K-1s. The total qualified net income on Form 3804 Wks line b does include this additional deduction (line 1-11 minus 12 & 13). The deduction also appears on CA K-1 Line 13e as expected.
2) Designating one member as RT on Sch K-1 Wks moves the member name to the Trust Name field of Form 3804 Wks with no form errors.
If you have time, would like us to review your return, and would be willing to send us a “diagnostic” file that has your “numbers” but not your personal information, here are the instructions:
Please go to Online in the TurboTax header.
This diagnostic copy (numbers only; no personal info) of your tax file will allow us to see the same experience you are having. If we are able to determine the cause, we'll reply here and provide you with a resolution. This may take a few days.
Patricia,
Concerning "1) Adding Section 754 Depreciation to Form 1065 p405 Line 13(d)C, Code W, adds an amount to Line 13 of the Federal K-1s.", I just want to point out that according to the IRS, Section 754 Depreciation under sec 743b is supposed to be reported under Code "V", not "W". And, that is how I reported it.
"The partnership would allocate depreciation expense related to the section 743(b) adjustment of $1,600 depreciation for Partner A and would report that expense on Schedule K-1 (Form 1065), line 13, code V."
I will also note that starting in 2021, TTB does provide a new checkbox to facilitate "743b" adjustments, which if selected, does allocate the adj to Code V. However, it does not provide the same option at the state level.
Thus, I suspect that TTB calculated 3804 QNI and PTE tax if one checks the 754 box, but not the 743b box.
However, having updated TTB today, the 3804 Wks is now making the correct calculation and includes the line 13 Code V deduction! So all good on that count.
Just FYI, looks like Turbotax fixed this issue on my desktop version. Yay!
I'm using Turbotax Home & Business for 2022.
I entered K-1 into federal, and answered the questions for State.
In forms mode, in California Information Worksheet, there isn't anywhere about Form 3804 Pass-Through Entity Elective Tax. Can I incorporate my California Form 3804 using Home & Business? I see it in the Intuit ProConnect Ca information worksheet.
You may need to run through your state return again.
Patricia,
Thank you for responding!
I was able to get the Form 3804-CR and it had filled in the amount that I had entered in Part I, and Part II line 1.
You had previously referred to the California Information Worksheet having "Form 3804 Pass-Through Entity Elective Tax" and using the QuickZoom link to open Form 3804. I don't see Form 3804 mentioned in the Worksheet.
How can I do this with TurboTax Online (which doesn't let you use Forms Mode)?
Hi,
I need to make an amendment to my CA taxes in order to add California Form 3804 for a Pass-through entity.
I need help with the steps to do this as an amended and cant find a path to generate and include the form.
Thanks if you can help.
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