How do I resolve my Turbotax errors with my Sch K-1 Box 16 (Fgn Tax Code I Ln 2 col 3) and Box 20 Code Z (no Section 199A income has been entered on Statement A)?

[DavidS127]

For the Form 1065 Schedule K-1 box 16 code I, more information may help resolve your issue.  For example, are more than one amount and/or country being reported for the interest expense being allocated to you, and have you completed the subsequent screen to enter the income associated with that interest expense, broken down between U.S. and Foreign sources?

For the box 20 code Z, enter the code Z when you enter the K-1 box 20 screen, but you don't need to enter an amount on that screen.  Continue on, and you'll eventually find the screen  "We need some more information about your 199A income or loss".  When you check the box next to a category on that screen, a place will open up to enter the amounts from the Statement or STMT that came with your K-1.  The applicable category (or categories) on this screen (and the following "Let's check for some uncommon adjustments" screen, if applicable) must be completed in order for your K-1 QBI information to be correctly input into TurboTax. 

To get back to the K-1 summary screen and find the Schedule K-1 to edit, click the "magnifying glass Search" icon on the top row, enter "k-1" in the search window and press return or enter, and then click on the "Jump to k-1" link to find the K-1 you need to edit.

Here are the "We need some information about your 199A income or loss" and "Let's check for some uncommon adjustments" screens where you enter the information from your K-1 Section 199A Statement/STMT:

[lmarkin55]

Perfect. This was exactly the reply I needed to understand K-1, Box 20 Code Z and Code AH handling.

[Shougun]

Using TurboTax 2021 Premier, the check box with label "Rental Income(loss)" does not appear on the "We need some information about your 199A income or loss" screen as shown in your picture.  This is the cause of my "Sch K-1 Wks-Partnerships: Box20 Code Z has been selected but no Section 199A income has been entered on Statement A." error.

During the review analysis "Check this Entry" step, I am able to click on the amount filed of the "Section 199A information" line and then click the plus sign that appears.  In the supporting details box that comes up, I can add "Rental Income (loss)" and an amount as they appear on my K-1 Statement A, but this does not resolve the issue.  The review repeatedly returns to this spot.

[PatriciaV]

You may be able to resolve this message by reviewing your entries from the Schedule K-1 for this investment.

1. Click Edit beside the Partnership that reported Section 199A income and confirm that you checked Box 20.
2. On the Enter Box 20 info page, be sure you entered "Z" for the code and an amount.
3. Continue to the page "We see you have Section 199A income."
4. Check the box that applies (typically, the income comes from the partnership that generated this K-1).
5. Click the first box (has business income) and enter the amount of Rental income(loss) in the second box.
6. Enter other information from Statement A that may apply.
7. Continue through the interview to see if you receive a tax break for QBI.
8. Repeat Smart Check to confirm the message is resolved.

[ppickman]

Problem: Box 20 Code Z:  I followed your instructions and fixed my problem for 2 K-1s.  Thank you.