Form 1065 - QBI error

[meades12]

I selected the Federal Review of my TurboTax Business.  I got an error message to correct Form 1065 p4-5 - 199A (page 1):  UBIA - The total amount is larger than the amount allocated to all Schedule K-1s.  Review the K-1 Statement A to ensure that the combined K-1 amounts for this item are increased by.....  What concerns me, as a former CPA, is that all the information it is asking me to correct is correct.  There is a nuance I am sure with the software you must work around.  The tax experts from TurboTax told me their superiors say they can't give tax advice on the business product.  I am asking to resolve an error message on your software that I purchased in good faith.  Your the tax experts right?  It is your software right?  It is an error message on your software?  Help me work around it, so it works.

[AliciaP1]

It would be helpful to have a TurboTax ".tax2021" file that is experiencing this issue.

You can send us a “diagnostic” file that has your “numbers” but not your personal information.  If you would like to do this, here are the instructions: 

At the top menu in the black line at the top of the page go to Online. 

1. From the menu, select Send Tax File to Agent. 
2. You will see a message explaining what the diagnostic copy is.  Click Send and then you will get a Token number. 
3. Reply to this thread with your Token number. This will allow us to open a copy of your return without seeing any personal information.  

We will then be able to see exactly what you are seeing and we can determine what exactly is going on in your return and provide you with a resolution.

[meades12]

The code requested is 950046.  Please advise on next steps as this return is due 3/15/22.  I appreciate the support and help.

[AliciaP1]

You need to enter each partners' share of UBIA on the Statement A for each K-1.

To enter the amounts please follow these steps:

1. Within your return switch to Forms mode by clicking the Forms icon in the upper right of your screen.
2. Click on Statement A (Page 1) under the first K-1.
3. On the UBIA of qualified property enter the 50% amounts of the total UBIA reported on the same line on the 1099A Summary (Page 1).
4. Repeat this for the other K-1 Statement A.

We don't know why this didn't populate directly from the total entry, but we have begun investigating the issue.

@meades12

[bquosigk]

Please help. I have the same error. My token number is [removed]-00270808.

[PatriciaV]

Please follow these instructions to post your token (this process has changed for tax year 2024):

In TurboTax Business, open your return and go to Online in the TurboTax header. (On a Mac computer, choose Share or Help.)

1. Choose Send Tax File to Agent.
2. You will see a message explaining what the diagnostic copy is.  Click Send on this screen and wait for the Token number to appear.
3. Reply to this thread with a screenshot of your Token number (this avoids Community filters for numbers with a dash) and tag (@) the Expert requesting the token from you.
4. Please include any States that are part of your return - this is VERY important.

We will then be able 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. 

@bquosigk 

[bquosigk]

I do not have an expert. @PatriciaV can you be my expert?

[bquosigk]

The state involved in WY.

[PatriciaV]

Thank you for the token. We have reviewed your business return and found that no UBIA was allocated to the partners on Statement A. The allocated UBIA will need to be manually entered on Statement A for each partner. You'll need to calculate the allocation yourself before making those entries.

The Ordinary Business Income on Statements A also needs to be updated to match the special allocations entered on the Schedule K-1 Worksheet.

Also note that the Partners' Liabilities Smart Worksheet on Form 1065 p5-6 needs to be allocated to the appropriate partners. This will resolve the form error on the Schedule K Reconciliation worksheet.

@bquosigk 

[bquosigk]

Thank you! I have checked the ordinary business income on the K-1s and Statement A and it matches. What am I doing wrong? Also, how/where do I enter the allocations of UBI and Liabilities?

[bquosigk]

[PatriciaV]

The QBI adjustments need to be made using Forms Mode on Statement A (appears below each Schedule K-1).
The allocation of liabilities is made on Form 1065 p5-6 under the Balance Sheet in the Partners' Liabilities Smart Worksheet.

Here is a quick table of what was shown on each Statement A for Ordinary Income and an example of the amounts that could be entered for UBIA and Ordinary Income. Be sure you calculate these numbers yourself.

Here is Statement A for one partner, showing the incorrect amount for Ordinary income and the empty UBIA box.

Here is the liability section that needs to be allocated. You can use an allocation code in the box for beginning and ending, example "O" for ownership percentage, "P" for profit percentage.

[bquosigk]

Thank you! With your help I was able to resolve all my issues. You are the best!