KristinaK
Employee Tax Expert

Deductions & credits

My preferred method would be to do this:

1. Determine how much of the ordinary income should be allocated to each partner. I assume that the tips are included on line 1a of Form 1065. As an example, let's say that the ordinary income excluding tips is $100,000. This will be divided 50/50 between the partners. Let's say the total tips are $20,000 but allocated 60/40. Partner I will have $62,000 allocated to them. Partner II will have $58,000 allocated to them. 

2. Go to Forms Mode (top right corner of TurboTax), and find Sch K-1 Wks (left panel)

3. Under Special Allocations, enter the amount you want to be allocated to each partner. 

4. Then go to Form 1065 p5-6, and enter A in the column for Special Allocations (see the screenshots below showing how it should look). 

5. The final result you are looking for is that each partner's Schedule K-1 will show the correct allocated amount in box 1. 

 

 



 

 

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