PTP K-1: One worksheet or separate for Box 20Z rental income?

[NCASTLE1955]

I have a Schedule K-1 from a publicly traded partnership (PTP) that has multiple income types listed in Box 20Z — ordinary business income, other net rental income, and Section 1231 gain/loss.

TurboTax combined all of these on a single K-1 worksheet classified as Passive-PTP.

Is this correct, or do I need to create separate K-1 worksheets for each income type? And if TurboTax did not flag it as an error, can I assume it handled it correctly with one worksheet?

[Mike9241 · Accepted solution]

a PTP has two tax routines. One is for taxable income, which is generally items reported in Part III lines 1 through 15 though there may be some additional data in box 20. Box 20Z is solely for the Qualified Business Income or loss that the PTP generates. (it is not part of taxable income).  In 20Z, only enter the QBI/199A income or loss. This is so TirboTxa will later prompt you for additional info concerning the QBI 

seems strange. Ordinary business income would normally be on line 1 in part III, but rental income/loss would be on line 2. TurboTax does not allow entering of these two lines on a single K-1. Each would go on a separate K-1, which may require certain separate items in part III to be reported on a specific K-1 

the 20Z inome/loss for each K-1 would be entered 

[NCASTLE1955]

I will have three separate worksheets for ordinary business income, other net rental income, and Section 1231 gain/loss.

My question is: for the remaining K-1 boxes such as distributions, AMT adjustments, excess business interest expense, business interest expense, and UBTI — which worksheet do they belong on? Do they all go on the ordinary business income worksheet, or do they need to be allocated across all three worksheets?"

[ThomasM125]

You would need to know which income the distributions, AMT adjustments, interest and UBTI belong to so you can put them on the proper K-1 entry. That information may be available in the notes attached to the K-1 schedule. You would need to make a separate K-1 entry for the business income and the rental income, then enter the other information on the K-1 that it applies to.

Most likely the section 1231 gain evidencing the sale of business property belongs to either the business income or the rental income, so you probably need just two K-1 entries. Unrelated business tax income (UBTI) is income a business receives that is not associated with it's main purpose. That would most likely belong to the business income as opposed to the rental. Interest expense could belong to either one, as could alternative minimum tax (AMT) adjustments.