Entering K-1 info into 1120 C Corp - Schedule C - TT business - Says to do it manually

[Jo-Homeseller]

I'm working with Turbo Tax Business on a 1120 C Corp return. I have a K-1 to enter which I did. However, the K-1 worksheet has an "important" note under 6c which says I must manually enter dividends onto Schedule C of the 1120. But which line should I enter the dividend amount on Schedule C ? Do I say because its from a Partnership it would be "other" line 20 OR does the type of company that originally produced the dividend at the K-1 level determine which line I place the dividend amount.

[Anonymous_]

---

@Jo-Homeseller wrote:
Do I say because its from a Partnership it would be "other" line 20 OR does the type of company that originally produced the dividend at the K-1 level determine which line I place the dividend amount.

---

This does NOT constitute tax or legal advice but I would opt for the latter.

Section 702(a)(5) of the Internal Revenue Code essentially states that dividends received by a partnership retain their character when distributed to partners while Section 243(a) simply refers to amounts received as dividends (which gives rise to the DRD).

Therefore, direct ownership of shares in the distributing corporation does not appear to be required and the dividends should retain their character when passed through to the corporation.

[Jo-Homeseller]

Thanks so much but I'm sorry I have to ask what is DRD?

[Anonymous_]

---

@Jo-Homeseller wrote:
Thanks so much but I'm sorry I have to ask what is DRD?

---

Dividends Received Deduction.

[Jo-Homeseller]

Thanks again, ever so much!

[Anonymous_]

You are most welcome.

[Rick19744]

I agree with @Anonymous_ comment that items that pass through from the partnership retain their character.

However, based on your facts, you are referring to your K-1 line 6c.  If that is in fact correct, then that figure may not need to be reported on your 1120 Schedule C.  See the commentary from the K-1 line 6c in the instructions:

Dividend equivalents are not reported on Form 1040. This information is provided for persons that are not U.S. persons, who generally are required to treat dividend equivalents as U.S. source dividends, and domestic partnerships with partners who may need this information. The ordinary dividends amount in line 6a does not include the amount of dividend equivalents.

So I am not sure we (and you) have sufficient information to know exactly how to report this amount.  My gut tells me that you do not report this on form 1120 Schedule C.

[Anonymous_]

---

@Rick19744 wrote:

So I am not sure we (and you) have sufficient information to know exactly how to report this amount.  

---

I agree with @Rick19744; insufficient information absolutely pertains here; I completely glossed over the line in the original post where it was mentioned that the figure was entered on Line 6c.

[Jo-Homeseller]

Thanks for your feedback ; however, I'm working on an 1120 not 1040. The note on the K-1 worksheet within Turbo Tax Business C-Corp return says, the number must also be entered on the 1120 Schedule C. I was trying to determine which line on the 1120 Schedule C was the correct line.

[Jo-Homeseller]

The note refers to any dividends 6a, 6b or 6c.

[Jo-Homeseller]

My bad - when I found the Dividends-Received Deduction commentary it cleared it up for me. This commentary is a drill-down inside the Schedule C, commentary.