Schedule k1 form 1120s line 17d(x) ERROR? TT automatically entered the UBIA amounts from 2015 and 2017 as income for 2018!

[hesed1968]

 I didn't discover this until entering K-1 into Form 1040.  I deleted the Code X line from K-1 in my 1040 to make the corporate loss show correctly, but I'm concerned that doing that could trigger an audit.

[DawnC0 · Accepted solution]

The amounts in Box 17 are not used to calculate your income, so nothing is really being added to income.  The UBIA amounts are only used to calculate the reduction amount of the QBI deduction if applicable (if you are over the QBI threshold amount).   

And the UBIA is an amount used for the calculation of QBI; it doesn't get factored into your actual income reported on your tax return.  The Unadjusted Basis Immediately after Acquisition (UBIA) reflects the basis of the property when it was acquired or placed in service, so these amounts could come from asset entries from previous returns.    

Code X is needed to properly calculate the QBI deduction.  Be careful when overriding data; that could void the Accuracy Guarantee.

See page 2 for a description of the Box 17 codes - https://www.irs.gov/pub/irs-pdf/f1120ssk.pdf

[hesed1968]

That proved true by not changing my income amounts or tax amounts when I entered the UBIA in Form 1040.  But it didn't solve the problem: my K-1 loss from 1120S is still not being deducted from my income in 1040.

[DawnC0]

K-1 income is considered passive income and there are limitations on what losses you can include.  This may help - K-1 issues.  

[hesed1968]

Thank you, DawnC.  I carefully waded through the link twice.  However, as I understand it, none of those limits apply to my situation this year because Form 1040, Schedule K-1, Section C concludes that the 6,792 is "Nonpassive Loss."  Also Section D, line E4 shows -6,792 as "Allowable QBI after passive/at-risk limits."  Also line E6 shows -6,792 as "Allowable QBI from this business."  This is my spouse's K-1.  
My K-1 has 6,791 as "Nonpassive Loss" in Section C, and -6,791 in the same 2 places in Section D.
And the -13,583 total is nowhere to be found in the income calculations of my Form 1040.  Neither is the -13,753 from line 18 of Form 1120S (page 4) Schedule K.
HELP!

[hesed1968]

Wow!  I just found that the "Rental real estate income" (Sch 1, line 17) in Additional Income, is 13,583 less than the "Total Rental real estate income" (Sch E, line 26).  So the software did subtract it out of income, without being explicit about it.
Good news that TT did what it was supposed to, even though it took quite a bit of stress and time to discover and verify that it did.
Bad news, that my Adjusted Gross Income is not going down 13,583 more, like I believed it needed to.