k1 disregarded entity

[r33]

2019 changes to K1 to capture Beneficial Owner of LLC. Turbotax Business asks for Beneficial Owner but puts the information in H2 rather than F. I think this is a Turbotax mistake. There is no way to correct. Also Item 11 may be incorrect as well.

[r33]

ATTENTION:TURBOTAX BUSINESS 1065 K1 DISREGARDED ENTITY IS WRONG FOR ITEMS F, H2, AND 11. IT NEEDS TO BE FIXED. See IRS Instructions for Form 1065 (2020) Specific Instructions (Schedule k-1 Only):Part II. Information About the Partner:If the partner in the partnership is an entity, such as single-member limited
liability company (LLC), that is a disregarded entity (DE) for federal income tax
purposes, enter the TIN of the beneficial owner of the DE partner in item E
rather than the TIN of the DE partner. The beneficial owner is the taxpayer who
owns the DE partner. In item F, enter the name and address of the beneficial
owner of the DE partner. See the instructions for item H2 below. Item 11 If any
legal owner of the partnership is a disregarded entity for federal income tax
purposes, report the beneficial owner’s entity type in Item I1.

[SRL38]

Did you ever find a resolution to this issue? I was just on the phone for an hour with 4 different people from Turbo Tax and no one could help with it. Very frustrating.

[r33]

No, there has been no resolution. The program continues to put in the wrong information. I am glad you responded and I wish more people would in hopes of getting their attention. I also tried the phone before I posted but got nothing. The only work around I see at this point is to file by mail and change the information manually. I also considered reversing the fields but have not fully explored that option.

[CarissaM]

Have you tried to delete the K-1 form? 

If you have tried deleting it, does the exact same issue happen when you add it back? 

Please post your results here. 

[r33]

Not sure how to delete the K1 without causing more problems like add a new partner and transfer ownership etc. I tried without saving it. The problem will still exist in my opinion. Here is the issue: In the step by step format under disregarded entity, when you fill in the beneficial owner, the data  fills in H2. H2 is where the disregarded LLC goes. To get around this, I basically reversed everything. That still leaves the problem of L1. When you reverse things and fill in the partner as the beneficial partner and partner type as individual, disregarded entity disappears. So you have to put in disregarded entity and that messes up L1. L1 is supposed to be the beneficial owners entity type which is I assume individual and not disregarded entity. I would really like to fix this before March 15. Note:  I experimented with TaxAct and it filled in the correct data except for L1. At this point I am still waiting for TurboTax to address the issue. You should also be aware that if you override you can't efile and have to get a waiver in California to print/mail.

Instructions for Form 1065 (2020) | Internal Revenue Service (irs.gov)

[SRL38]

What I've discovered is that by reversing the information under "BUSINESS INFO", "Partner/Member Information" will help to populate the information correctly on the K-1's. Therefore, put in the Beneficial owner's name in the Member's Name section, along with his/her SS#, etc.  From there, click DE and continue. Under the Beneficial Owner's name, enter the name of your DE.  HOWEVER, this is not a complete fix. When you run error check at the end, it will tell you that the DE's TIN is incorrect. I just did an override to blank it out and then it worked and I was able to file and transmit the returns. At the worst case scenario, the IRS will ask for the TIN's...maybe.  😉

On a side note, I am also trying to file a S-Corp return for NYS for another company and apparently, it's not available yet. I called Turbo Tax and the representative didn't even know the difference between a Federal and State return! If Turbo Tax keeps hiring unqualified people, it will certainly lose a lot of business.

[NCCG]

@SRL38 You're almost there!

You came up against what I'm presuming is an incorrect data validation format on the DE's TIN data field, invalidating EINs (and anything that doesn't comport with an SSN format).

To get the TIN of the disregarded entity correctly entered on Schedule K-1 H2, don't use Step-by-Step. In Forms view, open the Sch K-1 Wks and enter the correct EIN for the DE for each partner there. It will then correctly populate to the Schedule K-1. 

This is a huge and blatant programming error. Anyone using TTB to file a form 1065 with partners that are disregarded entities is going to experience this problem, whether they know it or not.

[idontwanttoregister3]

So am I understanding you correctly that you just did an override to blank out the DE TIN?  I am having this issue with two K-1s and need to get the d&%n thing filed

[NCCG]

Last year I did do an override in Form view. (I find this is often the workaround solution to the numerous errors we've experienced with both TurboTax Business and TurboTax Home & Business over the years.)

This year I didn't experience the error. The TINs populated the K-1s correctly.

Sorry you're still having the problem.