I am working in Turbo Tax Business on a multiple member LLC, some of which are Trusts. TurboTax will not accept a SSN for a Disregarded Entity (Trust). What can I do?

[PatriciaV]

Look under Business Info >> Shareholder information and edit the Shareholder that is a trust. Be sure you checked the box for "This shareholder is not a person..." and selected "Trust" from the drop-down. This choice should allow you to enter an EIN instead of a SSN for the Trust.

You'll also notice that Form 1120S page 2 Schedule B question #3 is marked "Yes." This requires additional info on Schedule B-1. Enter the name and tax id number of responsible party for the Trust (typically the Trustee).

[iitzen]

PatriciaV - Thanks for your response, however the Trusts are Disregarded Entities and do not have an EIN.  The income is reported to their SSNs which I have entered on Schedule K-1 (Form 1065), Line H2.  Now TurboTax will not allow me to file electronically.  Is there a workaround?

[PatriciaV]

Allow me to correct my previous instructions, and I apologize for the confusion.

Under Partner/Member Information, when you check "This member is not a person," one of the choices in the drop-down is "DE-Disregarded Entity (See help)." The Explain This link above the box identifies this choice as a member who uses a SSN and not an EIN.

When you make this choice and continue, the next page asks for the Beneficial Owner of the Disregarded Entity and the Tax ID Number. This information flows to Schedule K-1 Line H2, requiring no manual overrides and allowing you to e-file return.

[iitzen]

PatriciaV - I originally did exactly what you suggested, and the information does flow to Schedule K-1 Line H2 but when I get to Federal Review the following message comes up "Schedule K-1: Item H2, Partner's TIN is invalid.  If you don't have an EIN then the other valid entry on this field must be uppercase "APPLD FOR" to file electronically."  TurboTax will not allow you to file electronically if you enter a SSN for the Beneficial Owner of the Disregarded Entity in the Partner/Member Information.

I tried to do it a second time with the same result.  I am not going to enter APPLD FOR since the EIN will not be applied for.  The income will be reported to the SSN.  Do you have any other ideas or will I have to print the whole thing our and mail it in to the IRS?  Shame on TurboTax for not fixing this programming error.

[PatriciaV]

We have tested entering a partner as a disregarded entity with a SSN, but are unable to reproduce the Error Check experience you have seen. It would be helpful to have a TurboTax ".tax2021" file to test further.

If you would be willing to send us a “diagnostic” file that has your “numbers” but not your personal information, here are the instructions: 

Go to Online in the TurboTax Business header. 

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 your Token number.  

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. 

[iitzen]

PatriciaV - I appreciate your attempt to help me.  I went to the TurboTax Business Header and clicked on Online.  The following choices are in the dropdown menu:

Check for updates

TurboTax Website

View Installed Updates

Updater Preferences

There is no choice for Send Tax File to Agent.  How do I proceed to send a diagnostic copy for your use?

A couple other items of note; I have one Trust as a member of the LLC, I have 3 Disregarded Entities as members of the LLC, and I have downloaded one State tax return (Minnesota).  Do any of these items affect the problem I am having?