When a single schedule K-1 shows multiple sources of income (in Boxes 1, 2 & 3), should ordinary gain in the Schedule K-1 be entered more than once into Turbotax?

[WiseIconoclast]

If more than one box of the boxes 1, 2 and 3 of Part III (Partner's Share of Current Year Income, Deductions, Credits and Other Income) of a single Schedule K-1 have nonzero values in them, then Turbotax says you need to input data into Turbotax as if you have a separate K-1 for each box with a nonzero value. So, for example, if boxes 1 and 2 have nonzero values in them, then you have to input data into Turbotax as if you have two separate schedule K-1s.

The K-1 that I received is for a Publicly Traded Partnership whose main business is not in Real Estate. I have thousands of dollars of loss in Box 1 (Ordinary Business Income), but less than 20 dollars income in Box 2 (Net Real Estate Income). So I inputted the data into Turbotax as if I have two separate K-1s. But this essentially resulted in a doubling of the Ordinary Gain on Line 14 of Form 1040 (and Line 10 of Form 4797) compared to the Ordinary Gain that is shown on the K-1 I have. This seems like it must be incorrect.

But given the fact that Turbotax says you have to enter data as if you have a separate K-1 for each box with a nonzero value, I'm not sure what to do. Should I be inputting less data into the second K-1 section of Turbotax?

[Rick19744 · Accepted solution]

When entering the K-1 information, you do need to set up two separate K-1's for the input.

However, you don't enter the information twice.

On one K-1 input, you would enter all the information on the K-1 EXCEPT box 2.

On the second K-1 input, you would enter ONLY the box 2 information.

[WiseIconoclast]

Thank you RIck. If the magnitude of money recorded in Boxes 2 and 3 (typically less than 5 or 10 dollars) is much less than the magnitude of money recorded in Box 1 (typically a loss of thousands of dollars) for each of three consecutive K-1s (in 2015, 2016 and 2017). Do you (or others) think that the entry (or non entry) of these smaller amounts for Boxes 2 and 3 into Turbotax will have a significant impact on my tax bill?

Thanks again,

W.I.  

[Rick19744]

No.

But what you may or may not understand is that with a regular passive activity, the K-1's can be used to offset other passive activities; example income from one passive activity can be offset by a passive loss from another K-1.

That is not the case for PTP's.  Each PTP stands alone.  So if you have losses, those losses will not be able to be used currently.  The losses will be suspended until such time as the PTP begins to generate income.  Only then will those PTP losses be able to be utilized.

[danbon1]

Will Turbo Tax track these for me from year to year or will I need to keep record of these elsewhere?

[Rick19744]

TT should track these on form 8283 worksheets.

[danbon1]

Thank you Rick 19744!

[Rick19744]

Welcome

[paunils]

Rick19744 I have another question for you if youre around...My K-1 has the multiple source (Line 1 and 2). I have a supplemental schedule for a K-1 that lists ie. line 11 with multiple code letter I1-7. Do I repeatedly select code I and enter these amounts?

[Rick19744]

For your K-1 input sheets you will use two input sheets; as if you received  K-1's.
On the first input sheet you will enter all K-1 line items EXCEPT line 2.
On the second input sheet you will enter ONLY line 2 amount.

[paunils]

Got it!

[wkojr71]

I have a follow-up question. If Box 1 shows a small loss and Box 2 shows a substantial gain AND Box 20 Z Qualified Business Income is a loss, then must I enter Box 20 with my Box 1 entry or is there an advantage to include that line with my Box 2 entry to offset that gain?

[milipa1]

I understand that I have to input only once each items of the boxes reported on the K-1.  How about the capital question TURBOTAX asks you whenever you start a "new" K-1, do I only input begining and end capital once and then for the following "new" K-1 just input info on the relevant box without entrying or just using 0s for Capital?

Thanks a lot,

Millie

[rodderrs]

if have entries in box 1 and box 2, TT suggests creating two entries, where one version is just Box 2 and 13, and the other is Box 1 and all other boxes.  This leaves unexplained what to do with entries in box 20z where one of the items is often rental income.  (note that rental income goes in box 2 also).  So it seems illogical to have a separate version of the k1 in TT for Box 2 rental income and then have box 20 reported on the OTHER version of the k1 in TT.  Would seem more logical to instruct one version of k1 entries for Box 2 and Box 20.  THIS WHOLE COMPLICATION IS CREATED BECAUSE TT CANNOT HANDLE A k1 that has entries in box 1 and box 2.  Can't TT just fix that bug?

[AmyC]

@rodderrs You can enter the k1 box 20 entries on either form. The program has been this way for years and only the programmers know why. The key here is that the information is only entered once between the two forms. It does not matter so much which form other than the box 1 and box 2 must be separate. The program picks up the information and moves it around and makes it all work together.