Section 199A Income on K-1

[ksb2]

Do not enter the data for box 20 Z from you K-1 directly.  Leave box 20 Z amount empty and open the supporting document information using the Turbo Tax step by step questionnaire. (ie Do not enter it directly using forms).   Enter the information under box 20 Z supporting information and the error message will be cleared, allowing you to complete without producing an error message that will allow you to submit your taxes. 

The supporting information is provided by the Companies Accounting Firm, as an appendix or supporting  K-1  document.   

[JamesG1]

@vivsteve

Recommend that you complete box 20 section 199-A information.  Your partnership income may qualify for the Qualified Business Income Deduction.   See this TurboTax Help.  

Follow these directions to report 199A income from your partnership K-1.

At the screen Enter Box 20 info, you likely need to select code Z Section 199A information.  Code Z tells the software that qualified business income information needs to be entered at the screen We need some information about your 199A income.

Select Code Z and enter $0.  Click Continue.

At the screen We need some information about your 199A income, you will likely need the following information: 

• Ordinary business income (loss) from this business,
• W-2 wages for this business, and
• UBI of qualified property for this business.

These values may be found on an enclosed statement and not on the K-1 itself.

Enter these values for the qualified business income deduction to be calculated.  You hope reach the screen Great news!  You get a tax break.

The Qualified Business Income Deduction was created by the 2017 Tax Cuts and Jobs Act (TCJA) and is in effect for tax years 2018 through 2025.

[ksb2]

It may not be labeled as Statement A along with your K-1 form information.  It may be titled as supplemental information or the like.  Be sure to leave box 20 Z blank, using the Step by Step Turbo Tax method (do not enter it directly using Turbo Tax Forms method).  As you step though the questionnaire, it will allow you to input the supplemental information, with will allow you to complete box 20 Z information and eliminate the error of no matching income. 

After completing my taxes using this method, there were no errors reported and I was able to submit my Federal and State Taxes using Turbo Tax.

[cedartree]

My K-1 has an AH1 and an AH2 in the supplemental information sheet.  I could no see how to enter those?  How do I do that?

[JamesG1]

@cedartree

These basis adjustments are not recorded in TurboTax, but on the partnership books.  When the property is later sold, you will adjust the basis at that time for tax reporting. 

See Best answer here.  See also IRS K-1 instructions page 19 code AH Other Information.

[Dpags619]

I too am having trouble with box 20 Code Z with TT stating Section 199! income has ben entered on Statement A.  I've removed the zero amount and left the dollar amount blank but still get the same response when trying to electronically submit Federal taxes.  No Statement A was provided and when I contacted the company rep issuing the K-1 form1065 they told me they do not provide a Statement A.

This is obviously a TT issue that needs to be corrected for all of us having the same problem.

Anyone have other suggestions?

[JamesG1]

@Dpags619

In the K-1 interview questions, at the screen Enter Box 20 info, select code Z Section 199A information.  Code Z tells the software that qualified business income information needs to be entered at the screen We need some information about your 199A income.  Select Code Z and enter $0.  Click Continue.

At the screen We need some information about your 199A income, click on business income (loss) and enter the business income.  If you have been given this information, you should enter the following information: 

• W-2 wages for this business, and
• UBI of qualified property for this business.

These values may be found on an enclosed statement and not on the K-1 itself.  IRS Instructions for Schedule K-1 (1065) page 18 states:

The partnership will provide the information you need to figure your deduction.

The Qualified Business Income Deduction was created by the 2017 Tax Cuts and Jobs Act (TCJA) and is in effect for tax years 2018 through 2025.

[ksb2]

Enter the AH entries under 20 Z, using the Step by Step Method.  Leave the box 20 Z blank.  As you continue the program will ask for supporting entries.  This is where you enter the supplemental information supplied by the company’s accounting firm, along with the K-1 schedule.  The AH entries are entered here on the box 20 Z additional detailed information Turbo Tax requests. 

After completing this, any error message should disappear and allow you to complete your taxes.

[ksb2]

Check for other Turbo Tax errors using the error check or look for an exclamation  mark in the forms method.

[sammyoh]

This discussion has been very helpful, but when I get to the part to add the statement A detail the selection to add rental income is not visible as can be seen below. Is this a glitch or did I do something wrong?

Thanks so much in advance,

Sammy

[mpowers2twccom]

Tried this suggestion several times. Then some variations of it. Continue to have same error; "no value in section 199A income, statement A".

What form and line number is the value from Box 20Z suppose to transfer to? Can I review the form as I am completing the step-by-step?

[sammyoh]

You should be able to step through and then get to the screen I am having a problem with. You should be able to select what item you have and then input the number...my issue is that the selection I need "rental income" doesn't exist, even though based on this thread it was available last year.

[ksb2]

Even though you do not have income, you may still see income in other boxes or a carryover from last year.

Using the step by step Turbo Tax method, do not enter anything in box 20Z. As you continue you will reach a screen asking for box 20Z details. From the supplemental information provided along with you K-1 schedule information, enter each of the 20Z items in this form. This way, even though you will not get any benefit for this year, it will carry forward to next years Turbo Tax and will allow you to get any adjustment due when you finally sell your position in the future.

More important, it will allow you to complete this years Turbo Tax, without creating an error message, so that you can file your 2020 Tax Return, (Federal and State).

[ksb2]

Using the step by step Turbo Tax method, make sure that you have check box 20 information to input earlier in the interview entering K-1 information.  As you step though entering the other box information, when you get to box 20Z, leave it blank.  Continue stepping through the interview using continue, until you get to the screen asking you to enter the details for box 20Z.  At this point enter all of the supplemental information for box 20 provided along with you K-1 schedule information.  If you do not have any income in the previous boxes, it will not provide any deduction for year 2020, but will carry forward to future year taxes, and any adjustment due with you finally sell your holdings.  More important, it will allow you to complete this year's taxes (Federal and State) without a Turbo Tax error message.

Should you see more than one figure in boxes 1, 2 or 3  on you K-1 form, you will need to split it up onto multiple K-1 forms for Turbo Tax  to complete without an error message.  This years Turbo Tax asks this question about multiple information in boxes 1,2 or 3 earlier on in the interview for K-1 entries.

[sammyoh]

Thank you for your response, but it doesn't help me. I did as you had instructed and had checked box 20, leaving it blank and then had stepped through to the detail. I only have rental income and for some reason that is the only field not a selection in the detail as hopefully you can see in the screenshot below. This is true for all my K-1s with just rental income. Thus I'm getting the error message during the review process as you indicated.

Thanks again