Problem E-filing Form 1065 with trust as PR

[Mark B2]

Having a problem e-filing Form 1065.

2 member LLC; both members are trusts; one is the LLC's personal representative.

After successfully completing federal review with no errors and then attempting to efile, TurboTax says that I should not be entering 6 categories of information for the designated individual for the PR entity because the PR has an SSN for its taxpayer ID number.

But after deleting that information as requested, TurboTax then says that I must put that information in.

Back and forth . . . take it out . . . put it in . . . 

What is the fix for this?

[AliciaP1]

You need to be sure you have identified the partnership representative correctly on the Partner/Member Information screen for the partner.

To do this in TurboTax Business you can follow these steps:

1. Within your tax return, under the Business Info tab and Partner/Member Information click Edit for the trust that is the partnership representative
2. Make sure the trust is listed correctly with its EIN in the Social Security Number box
3. Check the This member is not a person.  It is an LLC or other business entity. box
4. Select Trust in the type of entity box that appears
5. Continue until the Tell us more about this member screen
6. Check the The member who has been designated as the partnership representative for the business box
7. Continue back to the Member Summary screen
8. Click the Federal Review tab and go through the review

[Mark B2]

Thank you.  Except that the trusts do not have their own EINs, nor I believe do they need to.  In the past (not using TurboTax), the SSNs have been used without problem.  TurboTax apparently does not allow that.

[PatriciaV]

Yes, there is a work-around, as there is no ready solution within the main interview. This process uses Forms Mode.

According to the On-Demand Guidance within TurboTax Business for the Designation of Partner Representative (right click on PR Name at the bottom of Form 1065 p1-3) --

To designate a partnership representative, either complete Part V of the Partnership Information Worksheet and check the Partnership Representative (PR) box OR check the "PR" (Partnership Representative) box for a partner on the Schedule K-1 Worksheet.

Note: If the partnership representative is an entity, complete the information for the individual that the partnership designates to act on the entity's behalf.

Because you prepare Schedule K-1 for at least one trust, you cannot opt out of the Centralized Partnership Audit Regime (Form 1065 p1-3 Line 29), which could resolve the situation.

Instead, open Forms Mode and confirm that the two forms mentioned above (Partnership Information Worksheet and Schedule K-1 Worksheet) contain the correct information. 

The PR checkbox on Schedule K-1 Worksheet is in the right-hand column under the Profit/Loss percentages as "Check applicable boxes:" For the PR TRUST, DON'T check the box that says, "the member who has been designated as the partnership representative for the business."

On the Information Worksheet, Part V, confirm that there is no SSN under the Member's information. Both the Partner and PR boxes must be checked.

Do not return to the Step-by-Step section for Partner/Member Information in case this action is resetting your entries. Save your return. Close, reopen, and run Federal Review again.

[rinalevi]

I had the same issue, and the only solution that worked to get rid of the error was to enter the trust SSN in the format of an EIN - XX-XXXXXXX.