Do I need to file Schedule K-1 -199 Supplement on form 1065? What is UBIA Code AB? What is STMT on Schedule K-1 on line 20 means?

[kathy76011]

On Schedule K-1 (Form 1065) line 20 other information.  It have V *STMT and X *STMT.  I would like to know what is that mean.

On Form 1065 this year Turbo Tax show that I have schedule K-1 199A Supplement (line 20).  I would like to know UBIA Code AB column what is it.  Can you give me more explanation.

[Rick19744 · Accepted solution]

See a copy of the Schedule K-1 and the codes for box 20 in the attached link:

https://www.irs.gov/pub/irs-pdf/f1065sk1.pdf

This information needs to be reported to the partners in order for them to determine their qualified business income deduction on their 1040.

[rwscentral]

If ownership % is different than profit/loss %, should line 20 AB be based on ownership for each K1 OR profit/loss %.  i.e. is the limitation calculation based on true ownership or allocated portion of unadjusted assets that earned that income, regardless of true ownership within the partnership.  Turbo Tax appears to work on what is selected in the options on the first page of the 1065.  So if profit and ownership % is different, the UBIA is potentially wrong??  Solution?? Manually change?

[rwscentral]

Depending on the answer, also comment if I already filed with the wrong UBIA for partners, what do I do?

[Rick19744]

All information related to the QBI information on the K-1 should be based on the P&L allocation.
If your ownership percentages are different that your P&L percentages, hopefully you have consulted with a tax professional.  For the majority of partnerships those figures should be the same.  If they are different, then that means you have reviewed the regulations under Section 704(b) and are confident that the allocations will pass the substantial economic effect test.  

[rwscentral]

OK, let's assume they are different and that is allowed. (There is a reason why ownership and profit and loss percentages can be set different in Turbo Tax and further why different allocation options are available)  Further, if I do change the allocation of profit to ownership %, it does in fact change the unadjusted basis allocated to each K1 in Turbo Tax.  So is there a reason why I can't select profit % for earnings and ownership % for UBIA?   It seems like it should always be based on Ownership unless you are telling me UBIA is evalutated based on % of profit as it relates to % of total assets in the partnership and not true ownership.  That could make sense.

[Rick19744]

Based on P&L percentages as noted above as this is where the economics of the business impact the owners.

[evatejada]

Re: Do I need to file Schedule K-1 -199 Supplement on form 1065? What is UBIA Code AB? What is STMT on Schedule K-1 on line 20 means?

[hbui48]

What is UBIA code?

[CatinaT1]

UBIA should be an amount.  It means Unadjusted Basis in Assets.