Hello,
I received a massive K-1/K-3 from a hedge fund, and I think TurboTax (using Premier Desktop) is overall not very equipped to handle it. Specifically, I have four questions:
QUESTION 1: Under line 11, I have numerous items listed: 11a, 11c and 11i. 11a and 11c seem to be recognized by Turbotax, but for 11i I have all these different listings:
NET IRC SECTION 475(F) INCOME
NET IRC SECTION 988 GAIN
NET SWAP INCOME
DIVIDEND EQUIVALENTS - SWAP INCOME
OTHER ORDINARY INCOME
During the interview, if I manually enter each item using the "I have another description item" option, the income doesn't get counted in the overall 1040, and the only way to get the income accounted for is to lump all those amounts under "Other non-passive income to be reported on schedule E, page 2". However, I really don't know if I am legally allowed to do so, I'm afraid I will get in trouble.
QUESTION 2: Similarly, for deductions I have a few listed under line 13w:
OTHER TRADE OR BUSINESS EXPENSE
DEDUCTIONS - PORTFOLIO
Also here the only option I have to get these automatically counted by TurboTax is to lump them under the "Nonpassive Deductions to be reported on Schedule E, page 2", otherwise they just get listed but never used. Once again, I do not know if this is legal.
QUESTION 3: I have a large deduction under section 13h. The instructions attached to the K-1 explicitly say that for individuals this "DEDUCTIBLE BUSINESS INTEREST EXPENSE" should be reported on schedule E. However, TurboTax doesn't list it there, and it seems to be using form 4952, but since I am taking the standard deduction it will not work for me. How can this be overridden?
QUESTION 4: I have a large K-3 and a small amount of foreign tax credit (~$50). It is going to be physically impossible to report all the countries listed in the K-3 under TurboTax, there are 10+ countries. If I just omit it and forego the ability to recover the foreign tax credit, would that be illegal?
I am very discouraged by this process. Do I stand a chance, or do I have to request a refund for TurboTax and go with a professional tax preparer this year?
