Why do I have an income when our business declared a loss? i noticed on schedule K-1, page 2, line 14, code C, Gross non-farm income is almost $6000. Why is that?

[scottyhow]

Why do I have a  positive income of $6000 on schedule K-1, page 2, line 14, code C, non-farm income when we had a loss?

[Anonymous]

14c goes nowhere unless you are a farmer  - then it affects calculation of estimated taxes.   

Box 14 of the partner’s K-1 displays an entry C showing profit before deductions. Gross income from line 3a is going to line 14c on the K and then to the K-1 entry. How is this number calculated?The amount on line 14c is non-farm income.  

Line 8, Total Income, Page 1, Form 1065 (divided by ownership percentage of general partners vs limited partners)

plus Line 3a, Other gross rental income (loss), Form 1065, Page 4, Sch. K

minus Form 1065, page 1, lines 5 and 6

if you are a limited partner this line shouldn't appear.  

[coxmargery]

OK, so then if my K-1 has a Gross Amount in 14 - C, I can ignore it (since it is non-farm income) when I complete Federal form 1065?  Turbotax instructions seem to want both 14 - A (self-employment earnings - good) AND 14 - C amount but then adds them together so my income is greatly overstated!  Am I interpreting Turbotax instructions incorrectly?  Thanks, everyone!

[coxmargery]

Sorry, I figured it out!  Had made a different entry in another location that skewed my form.  All good now.  

[KIngaBeata]

I have the same issue, how did you fix it? Where did you enter the wrong info?

[ReneeM7122]

You may need to use forms mode to remove line 14c.

How do I view and delete forms in TurboTax Online?

• Open or continue your return in TurboTax.
• In the left menu, select Tax Tools and then Tools.
• In the pop-up window Tool Center, choose Delete a form.
• Select Delete next to the form/schedule/worksheet in the list and follow the instructions.

@KIngaBeata

[tuxedorose]

@coxmargery   Hi. im having the same problem you had .   what did you discover was the mistake you made that you said you fixed?

[season1974]

Yes, I wish the person would have explained the issue they fixed. I'm having the same problem but I don't know how to fix it. 

[MarilynG]

Per Expert @Irene2805:

"Enter both amounts.  The amounts in Box 14, with Codes A and C, just describe the type of income reported in Box 1 of the partnership K-1.  They are not added to income.  

• Code A indicates that the income is considered self-employment and Schedule SE has to be generated.
• Code C is used to trigger the nonfarm optional method on Schedule SE (Form 1040)."

[pelicanassets]

My return is showing income in Schedule K line 14c as non farm self employment income. I have no self employment income.  How can I zero out this amount in line 14c?

[PatriciaV]

If you received a Schedule K-1 that reports self-employment income that you're unable to connect to other income reported in Boxes 1-3, you may need to contact the company that sent you the K-1 for an explanation. You must enter all information from Schedule K-1 for an accurate tax return.

Note that if you received guaranteed payments, this income is considered to be self-employment.

@pelicanassets 

[Rick19744]

@pelicanassets 

You do not need to worry about this figure unless you are a farmer.

This figure will only be used by those filing as a farmer and is used for purposes of determining a 2/3 test.

Farmers have special estimated tax provisions if they meet the 2/3 test.

So unless this applies to you, just ignore the figures.

[pelicanassets]

I learned a great trick from Turbotax support that I want to share on this subject.  You can right click on the line 14c amount in the Turbotax program and select override, then enter zero.  Thank you to Marvin at Turbotax support for figuring this out.  I hope this tip saves you the many hours it took me to find a solution.

[PatriciaV]

Note that using the override function in Forms Mode may invalidate your return for e-filing. (This is available only in desktop versions of TurboTax.) 

If the box and/or font turns red, click on the Errors icon at the top left above the forms list. This will open a footer below the form to display the errors on the form.

The better solution is to revise or delete the problem number where it was entered. Right-click on the box and choose "Data Source" to see where the number came from.

@pelicanassets 

[AmeliesUncle]

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@pelicanassets wrote:

I learned a great trick from Turbotax support that I want to share on this subject.  You can right click on the line 14c amount in the Turbotax program and select override, then enter zero.  Thank you to Marvin at Turbotax support for figuring this out.  I hope this tip saves you the many hours it took me to find a solution.

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Line 14c is SUPPOSED to have an amount on it, even if the business didn't have a profit.  Don't override it to $0.  It is a bit horrifying that somebody at TurboTax support told you how to force an incorrect K-1.