Goodwill depreciation

[terence]

Here is my situation. I purchased a 20% share of an LLC. Some portion of that purchase was allocated to tangible goods and the remainder was allocated to goodwill. The portion that was considered goodwill was $127,845.

My understanding is that this goodwill can be depreciated over 15 years, which amounts to $8,523 per year. This amount appears on the K-1 that the LLC prepares for me every year in Box 13 code W in previous years and code ZZ in 2023. The K-1 calls this "743(B) Amortization".

In TurboTax, when I enter Box 13 code W or code ZZ as shown in my K-1, I'm expecting to pay less federal taxes. I've edited my K-1 entry in TurboTax with and without Box 13 but TurboTax continues to show me the same amount of federal tax due.

Am I entering this correctly? How can I verify that this deduction is correctly applied to my taxes?

Thank you.

[Mike9241]

13W is water an soil conservation

13V is the 743 adjustment

perhaps there's an error on your k-1

this is from 2023 k-1 instructions

Code V. Section 743(b) negative income adjust-ments. The partnership will use this code to report the net negative income adjustment resulting from all section 743(b) basis adjustments. The partnership will provide your section 743(b) adjustment net of cost recovery at year end by asset grouping in box 20, code U.
Code W. Soil and water conservation. Soil and water conservation expenditures and endangered species recovery expenditures. See section 175 for limitations on the amount you're allowed to deduct.

[terence]

Thank you for your reply. In 2023, the K-1 listed Box 13 with code ZZ, which is what I used in TurboTax.

The instructions say:  "Code ZZ. Other. Any other information you may need to file your tax return."

Does TurboTax not recognize code ZZ as a deduction?

Should I use code V instead even though the K-1 says code ZZ?

Thank you.

[RobertB4444]

Code ZZ is informational.  It is designed to give you information about your basis in the LLC.  It is not designed to give you deductions for the current year.

It is possible that the loss in code zz represents a passive loss that you are not entitled to this year and that will be carried forward until the year that you completely dissolve your interest in the LLC.  But you should communicate with the LLC itself to find out what these numbers represent and make certain that you are entering them correctly.  You may want to consult a tax professional for this year.

@terence