You need to find out if the numbers in Box 20 appl...
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Level 2

Should I include all values in a K-1 entry with Box 1 or can I pair a Box 20 loss with a Box 2 gain to offset income?

I'm wondering of there is any advantage or rules as to the handling the different entries Turbo Tax requires for K-1s with values in multiple boxes.

5 Replies
Level 9

Should I include all values in a K-1 entry with Box 1 or can I pair a Box 20 loss with a Box 2 gain to offset income?

You need to find out if the numbers in Box 20 apply to your actual business income (Box 1) or to the rental income (Box 2), and enter it according to that.
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Level 2

Should I include all values in a K-1 entry with Box 1 or can I pair a Box 20 loss with a Box 2 gain to offset income?

Excellent. Thank you, TaxGuyBill. So it seems Box 20 value coded "Z" for "qualified business income" would go with the box 1 k-1. On the second tt k1 for box 2, I'd simply leave box 20 empty.
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Level 7

Should I include all values in a K-1 entry with Box 1 or can I pair a Box 20 loss with a Box 2 gain to offset income?

NO - code Z in Box 20 is the amount included in total income that is classified as "qualified business income" (Section 199A income) for purposes of the 20% QBI deduction on line 9 of Form 1040 (you don't want a 20% deduction for QBI?). Please stop thinking you can "combine" things - it doesn't work like that. Just enter the K-1 amounts into the proper fields with the proper Box "Codes" and be done with it - your return will come out correctly then.
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Level 9

Should I include all values in a K-1 entry with Box 1 or can I pair a Box 20 loss with a Box 2 gain to offset income?

@TurboTaxTerry   In TurboTax, it tells you to enter it as a separate K-1 if there are amounts in Box 1 (usually non-passive) and in Box 2 (usually passive). That means the user will be entering it as if there are TWO K-1s.  So the user is trying to figure out WHICH of those two K-1s to enter the information from the other boxes of the real K-1.  
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Level 7

Should I include all values in a K-1 entry with Box 1 or can I pair a Box 20 loss with a Box 2 gain to offset income?

There is very much a difference in how different types of income and deductions are treated in a tax return. You shouldn't combine any two different things. The entity's tax preparers have already done all the combining for you and what's left over are the values you see on the K-1.

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