Yes, I meant Item I1, not I2. Apologies for the typo. I work for a public accounting firm, and in GoSystem Tax, Item I1 is correctly completed using the beneficial owner’s entity type.
The instructions for Item I1 on Form 1065 state: "State whether the partner is an individual, a corporation, an estate, a trust, a partnership, a DE, an exempt organization, a foreign government, or a nominee (custodian). If the partner is an LLC and has elected to be treated as other than a DE under Regulations section 301.7701-3 for federal income tax purposes, the partnership must enter the LLC’s classification for federal income tax purposes (that is, a corporation or partnership). If any legal owner of the partnership is a DE for federal income tax purposes, report the beneficial owner’s entity type in item I1.
Based on this, the beneficial owner in my case should be reported as an individual. However, the TurboTax business software does not allow me to select “Individual,” and it will not allow me to complete Item H2 unless I select “Disregarded Entity.”
