The section 199A information for box 20 code Z on several of my K-1 1065 forms has 5 apparently separate sections; one 'Rent' with one value and four 'Passthroughs' with three to four entries each (Rental Income, Other Deductions, W-2 Wages, and Unadjusted Basis of Assets). How do I enter all of these for each K-1? If I check "The income comes form another business" TurboTax only allows one Rent or Passthrough entry.
Also, what amount do I enter for the "Enter Box 20 Info Z - Section 199A Information"? I currently left it blank. Thanks!
Because your K-1 is reporting Section 199A information generated by the partnership and Section 199A information generated by multiple passthrough entities, you'll need to "split" this K-1 into separate K-1s for entry into TurboTax. Enter one K-1 with only the "box" amounts generated by the "main" partnership, and additional K-1s for each passthrough entity with only the "box" amounts generated that particular passthrough entity.
For all these K-1s, when you begin the K-1 entry use the same identifying information for the "main" partnership that sent you the K-1 (e.g., name of partnership, address, EIN, etc).
If you can't figure (deduce) that "split" from the information you have, you will need to contact the preparer of the K-1 to get those amounts.
You answer the "Is the business that generated the Section 199-A income a separate business owned by the partnership?" question as it applies to each separate K-1 you enter. In other words, on the "main partnership" K-1 you enter you will answer that it is "from that business", and on the others you will enter that it is from "a separate business owned by the partnership". TurboTax will ask for the name and EIN of each passthrough entity.
To enter the Section 199A Statement information for each K-1, enter the code Z when you enter the K-1 box 20 screen, but you don't need to enter an amount on that screen. Continue on, and you'll eventually find the screen "We need some more information about your 199A income or loss". When you check the box next to a category on that screen, a place will open up to enter the amounts from the Section 199A Statement or STMT that came with your K-1. The applicable category (or categories) on this screen (and the following "Let's check for some uncommon adjustments" screen, if applicable) must be completed in order for your K-1 QBI information to be correctly input into TurboTax.
To get back to the K-1 summary screen to edit or add a K-1, click the "magnifying glass Search" icon on the top row, enter "k-1" in the search window and press return or enter, and then click on the "Jump to k-1" link.
Here are the "We need some information about your 199A income or loss" and "Let's check for some uncommon adjustments" screens where you enter the information from your K-1 Section 199A Statement/STMT:
Enter the code Z when you enter the K-1 box 20 screen, but you don't need to enter an amount on that screen. Continue on, and you'll eventually find the screen "We need some more information about your 199A income or loss". When you check the box next to a category on that screen, a place will open up to enter the amounts from the Statement or STMT that came with your K-1. The applicable category (or categories) on this screen (and the following "Let's check for some uncommon adjustments" screen, if applicable) must be completed in order for your K-1 QBI information to be correctly input into TurboTax.
To get back to the K-1 summary screen and find the Schedule K-1 to edit, click the "magnifying glass Search" icon on the top row, enter "k-1" in the search window and press return or enter, and then click on the "Jump to k-1" link to find the K-1 you need to edit.
Here are screenshots of the "We need some information about your 199A income or loss" and "Let's check for some uncommon adjustments" screens where you enter the information from your K-1 Section 199A Statement/STMT:
The boxes 1-20 on the K-1 you received are the combined totals of the main entity and the passthrough entities. You must figure out how much of each box 1-20 is for the main entity versus each passthrough entity, and that is the "split" you use to enter the box 1-20 on the separate K-1s. The total each numbered box for your separate K-1 forms must equal the total for that box on the K-1 you actually received. For example, all box 1 amounts on the separate K-1s should add up to the box 1 amount for the actual K-1 you received.
The Section 199A Statement you received for box 20 code Z should already "split" the Section 199A amounts between the entities, so you enter the Section 199A amounts for each entity on the K-1 you've created for that entity.
Because your K-1 is reporting Section 199A information generated by the partnership and Section 199A information generated by multiple passthrough entities, you'll need to "split" this K-1 into separate K-1s for entry into TurboTax. Enter one K-1 with only the "box" amounts generated by the "main" partnership, and additional K-1s for each passthrough entity with only the "box" amounts generated that particular passthrough entity.
For all these K-1s, when you begin the K-1 entry use the same identifying information for the "main" partnership that sent you the K-1 (e.g., name of partnership, address, EIN, etc).
If you can't figure (deduce) that "split" from the information you have, you will need to contact the preparer of the K-1 to get those amounts.
You answer the "Is the business that generated the Section 199-A income a separate business owned by the partnership?" question as it applies to each separate K-1 you enter. In other words, on the "main partnership" K-1 you enter you will answer that it is "from that business", and on the others you will enter that it is from "a separate business owned by the partnership". TurboTax will ask for the name and EIN of each passthrough entity.
To enter the Section 199A Statement information for each K-1, enter the code Z when you enter the K-1 box 20 screen, but you don't need to enter an amount on that screen. Continue on, and you'll eventually find the screen "We need some more information about your 199A income or loss". When you check the box next to a category on that screen, a place will open up to enter the amounts from the Section 199A Statement or STMT that came with your K-1. The applicable category (or categories) on this screen (and the following "Let's check for some uncommon adjustments" screen, if applicable) must be completed in order for your K-1 QBI information to be correctly input into TurboTax.
To get back to the K-1 summary screen to edit or add a K-1, click the "magnifying glass Search" icon on the top row, enter "k-1" in the search window and press return or enter, and then click on the "Jump to k-1" link.
Here are the "We need some information about your 199A income or loss" and "Let's check for some uncommon adjustments" screens where you enter the information from your K-1 Section 199A Statement/STMT:
On my K-1, Box 20 says Z - *STMT"
On the explanation statement are included (1) Ordinary Income (Loss), (2) Self-employment earnings (Loss), Health insurance payments, W-2 Wages.
When I enter these items and amounts on the Code Z Section 199A worksheet, they add up properly and the total populates onto the return. However, the Code Box which says Code Z continues to be highlighted in pink (not yellow), and the amount is also pink. Obviously, I am doing something wrong as neither the Code info nor the total are being accepted. When I attempt to file the return, I am told that more information is needed and I end up right where as was before - i.e., at the screen where the Code is highlighted in pink and and also the total from the worksheet remains pink.
What the heck am I doing wrong???
Thank you for that thorough answer. Just one quick clarification. When you say:
"Enter one K-1 with only the "box" amounts generated by the "main" partnership, and additional K-1s for each pass-through entity with only the "box" amounts generated that particular pass-through entity."
are the "box" amounts for both "main" and pass-through, from boxes 1 through 20 on the main title sheet or are the boxes for the pass-through entities the 3-4 items listed for each pass-through (checking the appropriate boxes for "We need some information about your 199A income")? Thanks again for your help!
Enter the code Z when you enter the K-1 box 20 screen, but you don't need to enter an amount on that screen. Continue on, and you'll eventually find the screen "We need some more information about your 199A income or loss". When you check the box next to a category on that screen, a place will open up to enter the amounts from the Statement or STMT that came with your K-1. The applicable category (or categories) on this screen (and the following "Let's check for some uncommon adjustments" screen, if applicable) must be completed in order for your K-1 QBI information to be correctly input into TurboTax.
To get back to the K-1 summary screen and find the Schedule K-1 to edit, click the "magnifying glass Search" icon on the top row, enter "k-1" in the search window and press return or enter, and then click on the "Jump to k-1" link to find the K-1 you need to edit.
Here are screenshots of the "We need some information about your 199A income or loss" and "Let's check for some uncommon adjustments" screens where you enter the information from your K-1 Section 199A Statement/STMT:
The boxes 1-20 on the K-1 you received are the combined totals of the main entity and the passthrough entities. You must figure out how much of each box 1-20 is for the main entity versus each passthrough entity, and that is the "split" you use to enter the box 1-20 on the separate K-1s. The total each numbered box for your separate K-1 forms must equal the total for that box on the K-1 you actually received. For example, all box 1 amounts on the separate K-1s should add up to the box 1 amount for the actual K-1 you received.
The Section 199A Statement you received for box 20 code Z should already "split" the Section 199A amounts between the entities, so you enter the Section 199A amounts for each entity on the K-1 you've created for that entity.
Hi @DavidS127 :
I am a bit confused by some seemingly conflicting information in a couple of your posts. It is probably my understanding of the instructions which is causing the confusion:
In one post, you note "The boxes 1-20 on the K-1 you received are the combined totals of the main entity and the passthrough entities. You must figure out how much of each box 1-20 is for the main entity versus each passthrough entity, and that is the "split" you use to enter the box 1-20 on the separate K-1s. The total each numbered box for your separate K-1 forms must equal the total for that box on the K-1 you actually received. For example, all box 1 amounts on the separate K-1s should add up to the box 1 amount for the actual K-1 you received."
From this, I assume that if the K-1 amount is $100 and the pass through entity is $20, I create two K-1s in Turbotax, one for $80 (main entity) and one for $20 (passthrough).
However, in another topic I saw that your guidance said "If there are multiple businesses to report, you will need to produce a K1's for each of those businesses:
From this instruction, (and using the same scenario above) I would assume that for the main entity K1 I would input the $100 directly as that is the amount shown on my K1 and for the pass through entity I would put $20.
Can you please clarify which of these two scenarios is correct?
Thank you.
DavidS127 your information so far has helped a lot.
I have a similar case and there is only one remaining doubt I have. You say that we should split the K-1 into separate K-1s for entry into TurboTax. The statement attached with my K-1 has all the information I need to split boxes 1-20 between main and pass-through entities but I do not know whether I should also split the information in Part II, section L of the K-1. In TurboTax, this information is requested in the screen Enter Capital Account Information".
In my case, the aggregated fake numbers are:
| Capital Contributed During 20XX | 10,000 |
| Current Year Net Income (Loss) | 8,000 |
| Ending Capital Account | 2,000 |
Same question here. Total amount on the main K-1 and then individual pass-through K-1s reporting their own, smaller amounts? Or due you subtract the sum of all the pass-throughs from the main K-1? (For my case, I have rental loss in box 2, lets say 5,000. If all is attributed to pass-throughs, would I report 0 or $5,000 on the main K-1 before entering all the individual pass-throughs?)
Alternatively, I just spoke with an expert through TT and was told to enter an amount in Box 2 on each K-1 that matches the passthrough amounts for the entity being entered for Box 20, Code Z, for that specific K-1 entry. So, again lets say the K-1 I received shows -$5,000 rental income in Box 2 and the 199A info for Code Z shows 5 separate pass-through entities, each with -$1,000 rental income. I would enter 5 K-1 entries, each showing -$1,000 in Box 2 and each listing a different pass-through in the Code Z detail. But I was told only the first one would have the other info from my K-1 in just the first entry (interest income, capital info, etc).
@bstornelli : For what it's worth, I inquired with a friend who is a CPA, and they advised not to split the Box 2 section L information between the main entity and the pass through. Although this CPA doesn't use Turbo-tax (and thus this probably shouldn't be used as a definitive answer), her logic was that Turbotax should not be recording capital contributed via the pass through entity. The capital contributed is only counted from the main entity.
This passed the sniff check for me, so I'm going with it! Good luck.
@davidtoby : I am not a tax expert so please take this with a grain of salt.
My understanding of your example is as follows: The main entity issued a K-1 showing -$5,000 in Box 2. The pass-through entity is showing -$5,000 rental income in the 199A section of the K-1..
So in Turbotax, you create a first K-1 with the name, EIN, etc. of the main entity. For rental income you would put $0.
Then you create a second K-1 with the name, EIN, etc. of the main entity again (even though this will ultimately be the passthrough entity K-1). Leave Part 2 boxes J, K, L, etc. blank since you've already done this for the main entity. Then for rental income you put in $-5,000 and select the radio button a few screens later that indicates that the business that generated the Section 199-A income is a separate business owned by the partnership. This is where you will be asked for the name and EIN of the pass through entity.
It is confusing, because in your K-1 overview screen you'll have two identically named entities, but one is the main entity and one is the main entity with the ties to the pass through. I used lowercase letters to name my main entity and capital letters to name my main entity/pass through so that I could keep them straight!
Again, I am not an expert but this is what I have surmised from several sources on this forum, the Turbotax FAQ, and an informal consult with a CPA friend.
Hope this helps.
This has some logic to it although for the pass-through entity the K-1 entries would have $0 capital contributed and -$7,XXX losses which in my mind raises the question of: how can you have losses from a business to which you contributed $0?
But I think the data in the capital contributed is ultimately not used at all by turbotax, or at least that's my impression because I was looking at the form 8995-a that they generate and the amount of capital contributed doesn't show up anywhere as far as I can tell so perhaps it doesn't even matter what I put there...
I'm invested through a Schwab brokerage, and they have told me they will submit my K-1 forms and have already filed an Extension Request on my behalf because they are still collecting information from the issuer. This is a new experience; they claim it's due to a change in the tax law for 2020 returns. Does anyone else have this situation? I've already submitted my return with my two K-1 forms as they were sent to me. I'm not getting much clear info from Schwab or my broker.
do i enter k-1 info (like from box 11) elsewhere on 1040 or does turbo tax do automatically
@kahnma For the most part, you just make the schedule K-1 entry once in TurboTax and the program then takes the entry and places it on the correct lines on your tax return. One exception would be if you sold your partnership or S corporation interest, in which case you may need to report that as an investment sale separately from your K-1 entry.
Ren12, David gave a clear answer on how to split the Section 199A amounts between the "main k-1" and the "pass-through entity k-1", in another thread. I'll quote it here, because it helped me.
No, you must deduce the "split" of those box 1, 5, 7, and 14 amounts between the main entity and the passthroughs.
So, take a look at the Section 199A information reported for the passthrough entities, and compare that to the box 1, 5, and 7 amounts reported on the actual K-1. If the Section 199A for the passthrough entities is, say, $50 each of rental income for $100 of total "rental income" from both passthrough entities, and the box 7 net rental real estate income $100, then all the box 7 $100 goes on the passthrough entities' box 7 ($50 each) and none goes on the "main entity" K-1.
If the passthroughs report Section 199A ordinary income, you'll have to similarly "deduce" in which boxes that should be reported (box 1, box 5), and leave the "balance" on the "main entity K-1" box 1, box 5.
Box 14 is for investment income, and once you figure out the box 1 and box 5 you can hopefully deduce how much belongs on each passthrough K-1, with any "balance" on the "main entity K-1.
When you are finished, the box 1 for all three K-1s you entered should equal the box 1 amount on the actual K-1, and so forth.
If you can't determine the split for the information you have, you will need to contact the preparer of the K-1."
I did what you suggested for a 2021 K-1. However, when running the end of return checks, an error comes up requesting an amount to be entered in the Code Z Section 199 A Information. Can this be left blank for filing purposes?
It depends.
IRS Form K-1 (1065) box 20 Code Z Section 199A Information may have been provided by the preparer of the K-1.
IRS Instructions page 17 states:
The partnership will provide the information you need to figure your deduction. Use one of these forms to figure your QBI deduction.....
If 199A information has been provided, report Code Z in box 20 to generate the qualified business income deduction.
If no 199A information has been provided, do not enter Code Z in box 20.
I get that. The partnership has provided the 199A information and code Z was entered in TurboTax. However, TurboTax is asking for an amount to be inserted on the line for code Z, even apart from the additional information that it then requests. I don't know what amount to put in there.
You do not need to put an amount in that box specifically, but if you continue through the step-by-step interview process one of the following screens asks for the details of the Statement A - QBI Pass-through Entity that came with your K-1.
To ensure you have entered all the information from your Statement A please follow these steps in TurboTax Online:
@Lawrence V
I've seen two different answers from experts on this now. Both say that when you have a K1 from a partnership that lists multiple pass-throughs in Box 20, code Z, you need to create multiple K1 entries to accommadate each individual pass-through.
But in this thread, expert @DavidS127 says that you need to split the box amounts up to align with each pass-through K1 you create. You need to figure that out. The 199A statement should give you the details for the pass-throughs, and I suppose the remainder - the main boxes minus the sum of the pass-throughs - gets attributed to the main partnership.
In a different thread here (https://ttlc.intuit.com/community/business-taxes/discussion/re-how-to-enter-multiple-sec-199-passthru-entities/01/1412138/highlight/true#M47429), expert @DaveF1006 says you can put the full box amounts on the first K1 with the main partnership, and then when you create the rest of the K1 entries, you put the main partnership info (name, address, etc), and then leave all the boxes blank except for box 20. Then go through the step of entering the pass-through info for each one. (and you can list one of the pass-throughs on the main K1).
Are these incompatible, or are they two different ways of entering info in Turbotax that result in the same, correct entry on the actual forms?
These are two different ways of entering the info that result in the same correct entry of the forms. The end result needs to be that every dollar amount is reported in total from the K-1, but none are duplicated.
Thanks AliciaP1 and @DavidS127 . Upon reading your answers above I'm wondering if I entered 199A information incorrectly in TT for 2019 and 2020 and need to amend. This is for CRE LLC partnerships, some are funds holding many properties in different states, some only hold one property. In past years I had aggregated all the passthrough UBIAs and rental incomes together in TT. Is this completely wrong and require correction? The reason for my confusion is I"m noting different CRE partnerships report Section 199A information differently per below - please see my question for each:
1) RE LLC fund holds many properties, and list each property as passthroughs with separate EIN under Section 199A, Box 20, Code Z info - Q: Do I need to enter each passthroughs separately in TT?
2) RE LLC fund holds many properties (different states) but the passthrough listed in Section 199A, Box 20 Code Z info is the exact same LLC entity (same EIN as the main partnership). So in effect - its aggregated.
Q: Do I still need to list this same EIN as a passthrough?
3) RE LLC fund only had one property at the time. It listed multiple "passthroughs" but all for the same property. No separate EIN provided. Q: Can I aggregate all the UBIA/rental incomes into one since its for the same property?
4) RE LLC holds only one property, so no passthroughs listed. Q: Input into TT as is?
1-Yes, list each separate EIN.
2-Yes, it is a passthrough.
3-Yes, you can aggregate
4-Yes
Hi, my K-1 shows two entities under Line 20 Z, but one of the two entities shows $0 for every line item; I'm assuming I don't need to enter this information. The 2nd entity show some data on two line items (see below). I'm assuming I would have to add these numbers (-$11 and 287). Does this mean I only file one K-1 line entry for this in the "Enter Box 20" info (2nd image below in turbotax online) ?
Also,
I see this note that lists several states with activity. Do I need to file a separate state tax filing for each of the states below?