I invest in a bunch of partnerships, where GPs charge management fees. Yes I know these are not deductible federally since TIJA, but are still deductible in CA. My problem pertains to something else - entering these numbers in a way that passes checks.
One GP sent me K-1s where these fees show up as a *positive* number in Lines 13L and 20B.
Another GP sent me K-1s where these fees show up as a *negative* number in Lines 13AE and 20B.
Per this thread, I've entered K-1 worksheets (in form view) as-is and the federal return passes checks with no issues.
However, as I moved to California return (and haven't made any CA adjustments yet), the partnerships that report management fees as negative numbers trigger a check on CA Form 565 K-1 Worksheet that says "Line 20b Col b not between prescribed upper and lower limits". I assume this means that this entry in the federal (b) column should be positive after all and to achieve that I'd need to modify my federal K-1 worksheet?
Btw field 20b of the California worksheet is documented as "Investment expenses included on line 13e". Line 13e column (b) is populated for partnerships that report their portfolio deductions on K-1 as 13L but not as 13AE. Should I manually edit Line 13e of the CA Form 565 K-1 Worksheet? That doesn't resolve the error, but would be more consistent?
