How to enter information from Schedule K 1 form 1065, when box 1, ordinary business income and 2, rental income are checked. How do I allocate entries in box 5 thru 20?

[DanielV01]

TurboTax handles this as if they were two separate K-1s.  Please note the following instructions, which you will have to repeat for each type of income.  In boxes 5 through 20 (and especially box 20, which determines QBI), you can allocate the numbers to the specific activity that generates the amount.  For instance, both box 1 and box 2 should add up to the Box 20 code Z amount, but you will allocate each one's amount on the K-1 entry screens in order to make sure the QBI calculation is correctly done for each activity.  Please note the following:

1. Under Wages and Income, scroll down to the Subheading Business Income, and select K-1 (Partnership K-1) .  
2. On the screen Choose Type of Activity select whether it is Business Income or Rental Real Estate, (if business income, answer questions regarding your stock ownership and Material Participation, if rental real estate, answer the appropriate questions about being a Real Estate Professional, Active Participation, and Special Handling.)  It is also important that the income amounts themselves be reported in Box 1 or Box 2, depending on if it is Business Income or Rental Income. (You will do one of the activities first, start a "new" K-1, and repeat the process for the other business activity
3. On the screen Check Boxes That Have an Amount, you should select Box 20 info.  (Allocate remaining boxes to the appropriate activity.  There could be many or very few codes, 
4. You should see codes Z and possibly AA, AB, and AC  on the K-1 .  This information must be entered from the information on the K-1 for QBI to calculate).  Allocate the amounts in these boxes to their specific activity.  For instance, if box one says 20,000 and box 2 says 10,000, and code Z says 30,000, then code Z on the income K-1 will be 20,000 and the code Z on the rental K-1 will be 10,000. 
5. Select any that apply on the screen Other Situations, and any information to the question Did this business receive qualified payments from a cooperative.
6. Answer the question about anticipated income on the next screen, We're almost done.  If anticipated income is below the threshold, QBI will calculate after that screen.  If above, you will provide additional information, and QBI will calculate according to the final results of the calculations.

You may find the following FAQ helpful:  https://ttlc.intuit.com/replies/7036528

[davidny]

What if my K1 statement does not provide any information about how to allocate all the boxes between the ordinary business income and rental income?  What do I do in TurboTax?  Do I enter all the same information twice?  Or just enter it the first time for ordinary business income but leave it blank for rental income?

[hpabbati]

DanielV01, Thank you for clarifying the way to enter K-1 with multiple boxes among 1,2,3 are filled in.  Great information.

[hpabbati]

I had box1 and box2 with numbers filled in.  Hence, I chose to fill in two K-1 entries a described by Daniel. 

For the first K1 entry representing box 1, on the screen with title "We need some information about your 199A Income", I chose the first check box (business income) and filled in "Ordinary Business Income" box. 

For the second K1 entry to represent box 2, on the screen with title "We need some information about your 199A Income", I chose the first check box (business income) again and filled in "Rental Income" box. 

[DavidS127]

If you can't deduce the "split" between ordinary income and rental income on the Section 199A statement you received with your K-1, you'll need to contact the K-1 preparer for that "split". 

For example, if the total amount of Section 199A income on that Section 199A Statement is equal to box 1 plus box 2, you can deduce that the Section 199A income for the separate K-1s is equal to the box 1 amount for one K-1 and the box 2 amount for the other.  Or, if the Section 199A income is exactly equal to box 1 or box 2, you can assume that the 199A income is for that box.

Otherwise, you'll need to get that information from the K-1 preparer.

@davidny

[EKIN]

this post helped me when filing 2019 (same as original question), now working on 2020, my K1 did not have both 1. Ordinary business income (loss) and 2 Net rental real estate income (loss).  Only #2 is now on my K1.

so I would answer "yes" to the first since I did receive "Net rental real estate income (loss). My question, do I still keep the separate K1 just say "no" I did not receive K1, or should I delete this K1 entry since there is no #1.

[WendyN2]

You would delete the K1 altogether since you did not receive one - HOWEVER - if you do not know for a fact that you will not be receiving a K1 for this entity, please note that the due date for providing to partners is March 15th therefore "they" still have time to get one to you. I'd make sure you are not receiving one before deleting it out. Just my word of advice - again - if you are not sure whether or not to be expecting one.  

[EKIN]

I did received the K1 (2020)  but this time only "2 Net rental real estate income (loss)" has an entry.  Previously in 2019 filing I received K1 with both  1. Ordinary business income (loss) and 2 Net rental real estate income (loss).  if you look at the answer above, I had to enter two K1 for #1 and #2.

that is why I asked if I should delete.  or keep it with 0.  maybe next year will be #1 and #2 again.

[Irene2805]

Delete the K-1 you created for the Ordinary Business Income (Loss).  It is no longer needed since you only have income in box 2 of the K-1.  You can delete the K-1 by following these steps:

TurboTax Online

1. Click on Federal > Income & Expenses
2. Under S-corps, Partnerships, and Trusts click on the Start/Revisit box next to Schedule K-1.
3. On the Tell Us About Your Schedules K-1 screen.  Click on the Start/Update box next to the appropriate entity type (Partnership, SCorp., Estate/Trust). 
4. You will see the K-1 Summary screen.  Click  Delete next to the K-1.

TurboTax CD/Download

1. Click Federal taxes > Wages & Income
2. Under Business Investment and Estate/Trust Income click the Start/Update box next to Schedules K-1/Q.
3. Click Yes on the next screen, Schedules K-1 or Q. 
4. On the Tell Us About Your Schedules K-1 screen.  Click on the Start/Update box next to the appropriate entity type (Partnership, SCorp. Estate/Trust). 
5. You will see the K-1 Summary screen.  Click  Delete next to the K-1.

@EKIN

[Sharon Hutchins]

What if my K-1 statement does not provide any information about how to allocate all the boxes between the ordinary business income and rental income?  What do I do in Turbo Tax?  Do I enter all the same information twice?  Or just enter it the first time for ordinary business income but leave it blank for rental income?

[#11]

What if my K-1 statement does not provide any information about how to allocate all the boxes between the ordinary business income and rental income?  What do I do in Turbo Tax?  Do I enter all the same information twice?  Or just enter it the first time for ordinary business income but leave it blank for rental income?

[DanielV01]

@Sharon Hutchins  If you see my original answer at the beginning of this thread, those instructions should apply to your question.  When I wrote that answer, Box 20 with different codes appeared on the K-1.  Now Box 20 will have a Code Z, and you should have a statement that breaks down the different QBI categories.  Input into TurboTax is slightly different now but still similar to what I described.  But the principle is the same:  Your ordinary business income will be in Box 1, and Rental income in Box 2.  You can use the amounts there to calculate what percentage is Ordinary Business vs. Rental Income, and allocate the QBI information by those percentages.  You will still treat your K-1 as if it were two to report the rental income versus the ordinary business income into the program.

[Seeking___]

@DanielV01 Thanks.  Your information is helpful to my situation since I have a K-1 with both Box 1 and Box 2 information.  I understand how the box 1 and box 2 numbers come from the 199A.  However, when I go into the screen to input more information about my 199A income there are more lines than just Ordinary and Rental income (loss).  For example, my K-1 has a 1231 gain (box 10) and that is listed in the 199A.  Can that amount go in either K-1 entry (either box 1 inputs or box 2 inputs), must go to a specific K-1 (box 1 inputs vs. box 2 inputs), or broken out as a pro-rata share into each input?  I want to make sure I am entering this properly for QBI to calculate properly now and in the future.

[AnnetteB6]

The amounts on the K-1 other than boxes 1 and 2 can be included in either K-1 entry.  Just be sure that you only include it on one of the K-1s or it will be duplicated in your return.

@Seeking__

[Seeking___]

@AnnetteB6 Thanks!