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?
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.
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.
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.
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.
Will Turbo Tax track these for me from year to year or will I need to keep record of these elsewhere?
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?
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.
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?
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
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?
@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.
@AmyC thanks that is helpful to know.
Say I have a K-1 with Box 1 and Box 2 entries.
Two follow up questions:
You have an option to aggregate the businesses, but it is a lot more trouble to complete your tax return if you do, so I would advise against it.
You should only enter the partner share and capital account information on one of the K-1's.
I entered the Box 1 info, as well as the info in all other boxes, except Box 2. When I started on the "second" K-1 in order to enter the Rental Income, I couldn't un-check the boxes that indicate I have info in them (Boxes 13, 15, 18, etc.). As I go through the process, the amounts that I entered from the first K-1 are shown. Do I delete them as I am now on the "second" K-1? Or, leave them??
If I tell Turbotax that both K-1 reports are for the end of a partnership, the capital gain gets doubled. How do I avoid that?
@IdaDunnit Your Capital Gains should only be reported on one of your K-1's.
Click this link for more info on Reporting Final K-1's.
I also have entries in boxes 1 & 2 of my K-1. From what I can tell going through this thread of comments, nobody has explicitly stated the details of which entries should be reported with the box 1 (ordinary business income) K-1 and which entries should be reported with the box 2 (net rental real estate) k-1 . For the first K-1, I entered the amount from box 1 (ordinary business income), and then I went through the rest of the K-1 and entered all of the information from the other boxes that I could. For the second K-1, I entered the amount from box 2 (net rental real estate income), and then I did not add any additional info into the rest of the second k-1, because it has all already been entered into the other K-1, linked to box 1 (ordinary business income). Is this correct?
one one k1, report box 2 income/loss AND all rental income, w2 wages and Unadjusted Basis of Assets. These all relate to the rental activity. Include the stuff from the left of the k1 such as partners share, capital acct, loans. Do not duplicate these on the other k1.
On the other k1 take box 1 for ordinary income and all the other boxes not collected for rental activity.
Ignore any entries for depreciation shown on k1 notes.
If box 1 or 2 has a zero, then consider that a non entry and then do not have to create the duplicate k1.
"@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."
This seems silly. If turbotax is going to move things around behind the scenes why not let us just enter the form as is and then do the 'moving behind the scenes' instead of making it needlessly complicated.
I've had boxes 1 and 2 filled out in the past few years and didn't have to do it this way.
Go to Forms to uncheck box entries. When returning to Step-by-Step the box [ ] is empty.
When entering K-1 info a second time for same company because Part III has numbers in more than one box in boxes 1,2,3, I understand I only enter the dollar amount in the box I didn't enter in the first one. Please confirm. Also, On the first one ( i.e. box1 & 3) do I only enter 1 box or do I enter both boxes so as to get the statement that I have to create more than one K-1 for one company? Also, on the second K-1, it is recommended that I only enter one of box 1,2, or 3, but not any more boxes4-21. Do I also leave Part II blank in items J-N?