Schedule K1 your software has a major error

[dfailacci]

When I enter a number in box 16G (foreign Interest expense) your software sees it as a foreign tax.  That is incorrect.  This is precluding me e filing my taxes. and I can not download state VA tax software.

[AmandaR1 · Accepted solution]

This doesn't sound like an error. Box 16 reports foreign transactions; all of which flow to Form 1116 for the foreign tax credit. You can see this on the schedule K-1 pg 2 instructions here: https://www.irs.gov/pub/irs-pdf/f1065sk1.pdf What the software reads this as is based on the code and meanings are listed on page 2 (linked above) as well. Code "G" is for "interest expense" and code "L-N" are related to taxes. Let me know if you have any questions.

[roccobel]

TurboTax has many issues with processing Sched K1.  I entered 4 different K1's from different companies and Turbotax creates errors that are not there.

[HeatherPLO]

@roccobel:  Hello!  Please let us know what issues you are having by responding to the thread here to receive.  Someone will respond for further assistance.  

[roccobel]

On 3 separate Sched K1 - I get this error "Box 20 Code Z has been selected but no Section 199A income has been entered on Statement A."   But all items are entered correctly - Income is 0 or negative (loss)

[LinaJ2020]

The program probably assumed you had paid taxes to a foreign country.  If you did not pay tax to the foreign government, you can simply remove the Form 1116 "Foreign Tax Credit" from the program.  Here are the steps:

In TurboTax online,

1.  Sign into your account, select Pick up where you left off 

2.  From the left menu, select Tax Tools, click on the drop down arrow

3.  Select Tools

4.  Under Other helpful links, choose Delete a form

5.  Select Delete next to Form 1116 and Continue with My Return

If you have paid taxes to both foreign and the US tax authorities, the IRS allows you to claim a foreign tax credit on your US tax return.  To claim this foreign tax credit, you would need to file a Form 1116 Foreign Tax Credit.