Deductions & credits

You may not need to add any information regarding the K-1 income on your NC tax return, accept to assign income to that state.

Just pay attention to the questions in North Carolina regarding income, deductions or credits that may apply to your partnership income. The income entered on your federal return from the K-1 entry will also appear on your state return. There may or may not need to be adjustments made to the income to have it be properly reflected on your state return.

The income reported on the K-1 form would all be allocated to North Carolina based on where the property is located, I would assume.

If the property taxes are not listed on the K-1 schedule, then you can indicate that you paid them and was not reimbursed by the partnership, you will see an option for that when you work through the K-1 entry. The screen will say "Describe the Partnership" and have an option that says "I am required to pay supplemental business expenses on behalf of the partnership/LLC for which I am not reimbursed", as follows: