How to Split a K-1 with Box 1 and 2 Populated in TurboTax?

[Rockpowwer]

Hello, I’m working on my tax return in TurboTax and need help splitting a K-1 that has both Box 1 (Ordinary business income) and Box 2 (Net rental real estate income) populated. TurboTax suggests splitting the K-1, but I’m unsure of the specific steps to properly allocate the amounts across multiple sections of my tax return, since both amounts are listed in the same place.

There are some supporting statements attached as well. 

Is there a guide that I could be using for this or what would you suggest where to get started?

[AnnetteB6]

If your K-1 has more than one item filled in for boxes 1, 2, and/or 3, then you will actually enter two K-1s, one to report the income reported in box 1 and a second K-1 to handle the income reported in box 2 (and a third for box 3, if applicable).  The second K-1 will have the same basic information as the first one (name, Federal ID number, etc.), but it will report the income for box 2.  

As for the other items reported on the K-1, include everything but the income in box 2 on the first K-1.  It should not matter which K-1 reports the other items, as long as all of the information is only entered one time.  

[Rockpowwer]

I see. My K-1 only has box 1 and 2 populated, nothing in 3.
So i can literally make one K-1 with everything as is, except box 1. Then another K-1 with only box 2 populated and all the others empty? Except basic info non-dollar amounts of course. I don't need to prorate some of the other boxes on the second rental K-1 if they are tied to rental real estate?

[Rick19744]

No.  The first K-1 input should include everything except box 2.

The second K-1 input should only have box 2 amount input.

[Rockpowwer]

is this true when the K1 has STATEMENT A—QBI PASS-THROUGH ENTITY REPORTING?

this section has a table of each activity and its type and for columns line 1, line 2, line 10, 13, W2 wages, etc

some types have real estate listed so does this mean I could prorate some other boxes across the 2 entered K1s? 

or you would still suggest to put everything on the first K1 except box 2? and second one only box 2 without any prorates in other boxes based on Statement A?

[Rockpowwer]

as far as Schedule K-3, it seems that turboTax ask for totally separate K3s if there is more than one type of freign gross income. Does that mean if there are more than one countries listed? how to check my K3 to see if this condition apply and if i need separate K1s?

[RobertB4444]

You should still only enter the amount in box 2 on that separate K-1.  This is not something to report to the IRS.  This is so the TurboTax program enters the numbers on your tax forms correctly.  All of the deductions it honestly doesn't matter which of the two K-1s they are on.  They get sorted fine.  

@Rockpowwer 

[Rockpowwer]

thanks, and do you have any guidance on the k-3 question? where it asks to split up the k1 again..
i just dont understand if this means now I will have 4 total k1s in the system..

[AmeliesUncle]

I completely disagree with the other comments that say to only enter Box 2 on its own K-1, with nothing else, and the thought that all of the other boxes go on the 'other' K-1 with Box 1.

For the 'other' boxes, in most cases you need to know if that amount (or a split amount) applies to the Box 1 activity (usually non-passive) activity or if it applies to the Box 2 activity (usually passive).

For example, the K-1 could show some capital gains.  You need to know if that applies to a non-passive situation (for example, selling some machinery that is used in the business activity), or if that applies to a passive situation (for example, selling a rental property).

[Rockpowwer]

That is how I've done it over the past years with this same K1. I hope it is correct and I hope that my calculations to determine which other amounts are tied to Box 1 vs 2. For example, I have a STATEMENT A—QBI PASS-THROUGH ENTITY REPORTING that is a large table/grid of activities with most of them general description of RENTAL REAL ESTATE ( a few SSTB = Yes as well). That grid has a column called LINE 2 NET RENTAL REAL ESTATE INCOME (LOSS) and those amounts is what I am summing up to attribute to Box 2 of K1.
Does that sounds correct?