Hi, I need assistance, I entered the information into the turbotax program (Home & Business) that is on the Schedule K-1 as it was provided to me. But I can not file online because turbotax states it the following "Box 16 Description has been entered for foreign branch category deductions related to foreign source income (code L), but no code E income has been entered.", my problem is that the K-1 provided to me does not have a code E listed under box 16, instead it has code B listed. How should this get approached? And how can I fix it? All help is welcomed.
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This was a mistake by the partnership not reporting the income amount under Box E. When foreign income is paid, you are allowed to take deductions against the foreign income. Code L represents Deductions For Foreign Based Category. Code E represents Gross income for Foreign Branch Category. What Code L does is reduce the income from Code E but since there is no income to report inn Code E, the amount in Code L is useless. Code B represents all income, domestic and foreign.
My suggestion is to contact the partnership and request a corrected copy of a K1 that represents income for Code E or see if it is listed on the supplementary statement that came with your K1. If the partnership is unwilling to do this, then omit the Code L information on your return because it is useless and will cause error messages when you try to file.
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