TT Premier 2023 refuses to accept partnership K-1 data

[aysoref]

Our new LLC / partnership has rental income and also some expenses not attributable to a specific rental property; things like accounting costs, bookkeeping costs, registered agent fees, state registration fees, some office expenses etc. etc. 

TT Business 2023 gladly accepts all this correct info into the 1065, and generates K-1 where it lists the generic costs / expenses in box 1 [Ordinary business income (loss)], and the rental income in box 2 [Net rental estate income (loss)].

TT Premier 2023 is terribly upset about these K-1 boxes. Symptoms include:

- It wants me to select a "Type of Activity Reported on this Schedule K-1", the options are "Business", "Rental Real Estate", "Other Rental Activities", "Other (investment club, etc.)", and "Multiple types of activities".

Problem #1 = the K-1 printed by TT Business 2023 does not indicate this.

- Selecting the logical "Rental Real estate" checkbox, I get

Problem #2 = TT Premier 2023 triggers errors if I enter any data in box 1, tells me "Box 1 should not have any amount, checked participation box is for box 2". It does not let me copy info from the partnership's K-1.

- Leaving all selection checkboxes blank is no better.  TT Premier 2023 still does not let me enter the box 1 values.

Am I missing something simple here, if so what?

Is this an incorrect behavior by TT Premier 2023 in its current version?

Otherwise, how can I enter the box 1 info from the partnership's K-1 into my 1040's K-1 form?

[DoninGA]

The Schedule K-1 (Form 1065) for tax year 2023 has not yet been finalized in TurboTax.

It is scheduled to be available on 02/14/2024

Go to this TurboTax website for forms availability - https://form-status.app.intuit.com/tax-forms-availability/formsavailability?albRedirect=true&product...

[Mike9241 · Accepted solution]

This has been a constant issue with Turbotax so I don't know if it will be fixed for 2023. when you have amounts on multiple lines 1, 2 and/or 3, Turbotax requires you to enter each line on a separate k-1. 

I would say that for general expenses in your real estate partnership, you allocate those expenses on the rental schedules. Consistently use any logical method. such as an equal portion to each,  based on time spent on each, or revenue.  I don't believe reporting these expenses on page 1 of the 1065 is proper.  

[aysoref]

@Mike9241 Indeed, this is what I find. A call to Turbotax help desk was a waste of time. The rep told me that I should not enter data in the form itself, that Turbotax is not meant to be used like that and instead I should use the step-by-step interview, which will populate everything correctly.

Nonsense. The 2023 interview is not available yet. So just for grins, I went back to my 2022 Turbotax Premier version [by now complete, correct, stable software]. Followed the interview, which told me exactly what you said i.e. create a separate K-1 form for each line 1, 2 or 3. This means creating two (2) K-1's for each partner. Clearly not the original intent.

[Mike9241]

@aysoref here's another issue you may create by potting general expenses on page 1 of the 1065. These would be passive losses. However, they are not identified as being related to rental real estate. Thus these losses would be suspended until there is passive income. As I have stated in the previous post, these are related to the rental activities of the partnership and should be reflected as such on the 1065 not page 1.

[Critter-3]

If you have income to report on the K-1 form lines 1,2 & 3 then you will issue one K-1 per partner ... you do NOT issue 3 separate K-1 forms per person.   On the partner's personal tax return is where the K-1 gets entered as 2 separate forms ... on form 1 enter everything EXCEPT line 2  and on form 2 enter ONLY line 2 and the program will marry the 2 forms together. 

[aysoref]

@Critter-3 Thanks for the follow up. Indeed, this seems to be what Turbotax wants.

I am trying to avoid such extra labor, trying to avoid data entry mistakes [= which parts of the partnership's K-1 should I enter on K-1 form A, which parts should I enter on K-1 form B? The step-by-step process does not seem to support this approach]. And most importantly trying to avoid negative tax implications = which part is passive, which part is active, etc. etc. etc.

A previous suggestion, to just spread the generic / common business costs over the properties' 8825 forms seems to be the path of least resistance.

All that said, we can wish Intuit simply took care of it. After all Turbotax it is a software package that can be enhanced to deal correctly with this case. Mind you , I am not trivializing the software effort involved in this. After a 55 year software engineering career I know better than that. Still, it is possible... 

[cindi]

Where should I enter Medical payments paid by a real estate partnership?  If you use the guaranteed payments smart worksheet, it applies it to ordinary income.  Should it just be listed by hand as a general expense on 8825, then manually enter the amount in box 13 code M?

[aysoref]

@cindi I *believe* TT implements the law which expects such payments to be reported as ordinary income to partners.  Just repeating something I read in the past, may or may not be accurate.

[cindi]

I'll look into that.  I know it's supposed to be reported as a guaranteed payment but not sure about passive income vs ordinary income.  But ordinary doesn't make sense because you'd pay SE tax on it.

[drohiott]

Hello DoninGA Wanted to check in on the most recent date of availability to enter The Schedule K-1 (Form 1065) for tax year 2023 (Deluxe).  I see 3 weeks ago it was 02/14/2024??  What do you know now what the latest is.  It is currently not available of course.  

[DoninGA]

@drohiott 

Schedule K-1 (Form 1065) Partner's Share of Income, Credits, Deductions is scheduled to be finalized and available in TurboTax on 02/14/2024 (subject to change)

https://form-status.app.intuit.com/tax-forms-availability/formsavailability?albRedirect=true&product...

[john2020]

2-6-2024

Is the K-1 update still due 2-14  ??????

jqm

[DaveF1006]

Yes, 2/14 is the date.

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