I am trying to determine how to enter box 13 code W for the Schedule K-1 that I received ($2 amount). How do I choose from the Turbo Tax options for Enter Code W Detail?

[angelight3311]

These are the instruction for LIne 13w: Portfolio Deductions - The Portfolio Deductions from investing activities, if any, are non-deductible for certain taxpayers, including
individuals, and would reduce your tax basis in the partnership. Please consult your tax advisor.

[AliciaP1]

You need to enter your K-1 in entirety as it is reported on the form you have received.  To do this in TurboTax Online you can follow these steps:

1. Sign in and open your return by selecting Pick up where you left off under a section.
2. Search for K-1 and select the Jump to link at the top of the search results.
3. This will take you to the Schedules K-1 or Q screen.
4. Answer Yes and follow the prompts. You may be prompted to upgrade to Premier, if you're not already using it.
5. We’ll ask some questions about your K-1, and then you’ll enter the data from the form.

[angelight3311]

Thank you for your help with this issue. I have done all those steps that you outlined.

This is the page of those steps that I get to that  I don't know how to answer: Enter Code W Detail

"Enter Code W Detail

Select the type of detail supplied on your K-1, box 13, code W. Then fill in the requested detail regarding the $2 you entered on Box 13, for Code W.

Early Withdrawal Penalty

Investment Interest Expense

Miscellaneous Itemized Deductions

Nonpassive Deductions to be Reported on Schedule E, Page 2

Section 754 Depreciation

Taxes and State Income Withheld

I Have Another Description Item"

I am require to select one of the above options, but my Schedule K-1 does not seem to give any specific instructions on this.  There is an asterisk in box: 13 W* with the $2. *See attached statement for additional information." The 2021 Schedule K-1 Instructions page gives this message for Line 13w: "Portfolio Deductions - The Portfolio Deductions from investing activities, if any, are non-deductible for certain taxpayers, including
individuals, and would reduce your tax basis in the partnership. Please consult your tax advisor."

I do not know which of these above options is the correct one. If you have any advice, it will be most appreciated. 

[AliciaP1 · Accepted solution]

That clears it up - thank you for posting it!  This is not a tax reporting issue for you but affects your basis calculation.  You should not include the amount in box 13 on your tax return, but be sure to include it in your personal basis tracking.

@angelight3311

[angelight3311]

Thank you very much for your answer to this concern. I learned more and can now finish my tax return with confidence. Your time and support is most appreciated!

[jarcari]

I don't know which  answer to check for the choices turbo tax gives me for how to characterize the amount in the K-1 box 13W . I need to speak with a tax expert

[jarcari]

Ive done what Alicia recommended but my question remains

[jarcari]

The dollar amount in my K-1 box 13W is 51.00. Are you saying to report it as zero in turbotax? 

[AbrahamT]

What kind of details is the K-1 providing for that Code W . Unless it is a Section 754 adjustment  verify that the amount in Box 13 code "W" has not already been included in your K-1 income (box 1 or 2)If the amount is already included in income, no additional entries are required. See HERE for a further description of the 754 election  .The 754 adjustment reduces both  inside and outside basis equallyThe benefit is that you will receive deductions on line 13 of his K-1 against income of his tax return each year.   

[Bruce-W]

I have the same 13 W instructional message: "The Portfolio Deductions from investing activities, if any, are non-deductible for certain taxpayers, including individuals, and would reduce your tax basis in the partnership."  My box 13 contains a $46 value.

But I have no values in boxes 1, 2, 3, so which of the following "detail" boxes should I checkmark in TT?

Early Withdrawal Penalty

Investment Interest Expense

Miscellaneous Itemized Deductions

Nonpassive Deductions to be Reported on Schedule E, Page 2

Section 754 Depreciation

Taxes and State Income Withheld

I Have Another Description Item"

[Bruce-W]

Hi Alicia,  so you're saying DON'T include a value in line 13 with a code W on my tax return, even if I have a value there?  (My line 13 W has a value of $46.00).  Also: I do NOT have any values in boxes 1 (ordinary business income) or 2 (net rental real estate income).  But my current income listed in part II section L of my K-1 is $89.00.

If I'm to include it personal basis tracking, could you explain what that is?  

[DianeW777]

This is likely a miscellaneous itemized deduction that was formerly part of itemized deductions.  They have been eliminated on the individual return with tax reform (TCJA for years 2018-2025).  In the future it may be allowed again and for this reason they are not eliminated from your K1 for now. 

@Bruce-W 

[Meridian8904]

Hi all! Maybe I'm missing something here, but I'm not seeing a response to the questions from @angelight3311 or @Bruce-W re: which option to select on this one. My issue is nearly identical to the one both anglelight3311 and Bruce are running into --- e.g. there are no values in Boxes 1 or 2 and I have an $81.00 value/"deduction" appearing in Box 13 with a Code W* assigned to it.

To further complicate things, Box 16 ("Schedule K-3 is attached if checked") is also checked. Called Invesco and they suggested that the K-3's would be available in the May timeframe. I assume this means that I'll need to amend my 2022 return when it becomes available? 

Would welcome any input from the group!

[Bruce-W]

Hi Meridian8904,  I did receive what I view as a good answer to our issue, but it must be on a different thread. It came from and Expert level account holder named @AliciaP1 .   Click here on this link to  @AliciaP1 , and you should be able to see it.  As of this morning (March 18th, 2023), it is the 5th answer down on her list, and it's titiled Solved Re: Schedule K-1 (form 1065) & Schedule K-3.  Maybe if you simply click on THIS link to the title it will take you right there!

Best,  Bruce

[Meridian8904]

@Bruce-W 

Hi Bruce, I was able to click through to the link/answer you provided. Very helpful, thank you!