Section 199A Income on K-1

[JamesG1]

Click the first line that says 'business income (loss)'.

Boxes will generate including 'rental income (loss)'.

See TurboTax Help.

@sammyoh 

[Edited 04/11/2021 9:26 AM PST]

[ksb2]

First determine if there are entries for multiple boxes 1, 2 or 3.  If you see figures in more than one of these boxes, you will need to prepare separate K-1s  for Turbo Tax  to complete without an error message.

Using the Step by Step Turbo Tax method, complete all boxes except for box 20Z.  As you step though the interview, do not enter a value for box 20Z.  Click Continue, and you will be brought to a breakdown for box 20Z.  It is here that you provide the breakdown for all box 20Z entries, as provided by supplemental information along with you K-1 form from your LLC provider.  If you do it this way, you should not encounter the Turbo Tax error message about not providing income for box 20Z. 

If you do not have income in tax year 2020, you will not get any benefit this year, but you will be able to complete your 2020 taxes (federal and state), without encountering a Turbo Tax error message.

If you do not have income, Turbo Tax will carry over the amounts entered till the following year where when you sell your position, it will make the appropriate adjustments.

[ksb2]

Your 199A income is typically included in box 1 on your K-1 form and the Box 20Z income is included as part of this income.  If you do not have income in K-1 Box 1, you will not get a deduction for 2020.  However, it will carry over to the following year(s). When you sell your position,  the adjustment will be made. 

However, by not entering an amount at Box 20Z, but completing the entries later in the interview, from the supplemental information provided along with your K-1 form information, you will get Turbo Tax  to complete without getting the "no income" error message, in order to complete and submit your tax returns (Federal and State).

Note:  If you find amounts shown in more that one box 1, 2 or 3 on your K-1 form,  Turbo Tax will require you to split the K-1 form into separate Turbo Tax  K-1 forms, or you will get an error message.  Turbo Tax asks this question earlier in the interview for the K-1 form entries.  Make sure to click on this in order to split your K-1 forms into multiple K-1 for Turbo Tax to complete without producing an error message.

[sammyoh]

For other users, I figured out how to resolve my issue. Rental Income and Royalty Income are now found after the selection of business income is made. In other words, in the 199A detail select business income and then additional fields including rental income become visible.

[harisomasingh]

Schedule K-1 Section 199 A Information, Box 20, CODE Z

Descritption:

Rent - Investment in Operating Partnership

Rental Income (Loss)  -        Amount = -1,326.

Passthrough - Davenport Housing VII, L.P.

EIN: 20-3668448                      

                                                                AMOUNT

     Rental Income (Loss)  -                    -107.

     W-2 Wages -                                         16.

     Unadjusted Basis of Assets -        9,394

Passthrough - Crestview Housing Limited partnership

EIN: 20-5025787

     Rental Income (Loss) -                 -131. 

Where should I include the aforesaid figures when completing to fill Box 20, Code Z?

[Irene2805]

Line 20 of the K-1 for a partnership deals with income for the 199A (Qualified Business Income) deduction.  To enter this information, please follow these steps:

1. When entering the K-1, on the screen, Check Boxes that have an Amount, be sure to check Box 20. 
2. On the screen, Enter Box 20 Info, select Code Z and leave the dollar amount blank.
3. On the screen, We see you have Section 199A income, mark the appropriate radio button and click Continue. 
4. On the next screen, We need some information about your 199A income, be sure to check the appropriate boxes and entry fields will appear to enter the information.  This information should appear in the STMT attached to your K-1.]  
5. Enter any uncommon adjustments on the next screen and click Continue.

I've included a screenshot of what the entry screen for  Davenport Housing VII, L.P. should look like.  You should be able to enter the others since they only have entries for rental income.

@harisomasingh

[H J Myers]

I believe the question is where in TurboTax can one make the entry in statement A

I have an error message requiring me to enter information about 199A into statement A.

[JamesG1]

Schedule A information is actually entered at the screen We need some information about your 199A income.

At the screen Enter Box 20 info, you 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, many taxpayers will enter the following information: 

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

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

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.  See also this TurboTax Help.

[Nokabe]

NO, it did not work for me. Turbotax keeps asking me for 199A information which I will never have.

[JamesG1]

1. Does your K-1 (1065) report code Z in box 20?
2. Did you report code Z in box 20?
3. Did you also enter $0 as the value in box 20 code Z?
4. At the screen We need some information about your 199A income, are you able to click the box to the left of business income (loss)?  Do the boxes to the right display?
5. Are you able to enter a section 199-A value for business income (loss)?  This may be found on a separate statement.
6. If you do not have a section 199-A value for business income (loss), are you able to enter $0  Or the value in box 1 (if there is income (loss) reported in box 1)?

@Nokabe 

[Edited 04/15/2021 12:14 PM PST]

[MEGumby]

I'm having the same issue.  I filled out the page titled "We Need Some Information About Your 199A Income" by filling in my Ordinary Business Income that is on my Statement A as well as entering my UBIA of Qualified Property that it asks for.  The rest of my Statement A is blank so I don't have anything else to enter.  When I run the error check I get a message that Box 20 Code Z has been selected but not Section 199A information income has been entered on Statement A.  It's maddening!

[DanielV01]

@MEGumby  Try entering a 0 in the remaining boxes on the screen you mention (for Section 199A wages, etc.).  Sometimes it's necessary to type in some value, even if the value is 0 to clear certain diagnostics.

[maryonori]

See instructions under Fort Fun of 3/14/2020. That worked for me.

[jimmieslade14426]

For a partnership K-1 submission, I entered code Z and no number on Line 20 of the K-1. When I get the message to correct two (2) for 199A, I tried entering "0", "1", "-1" and other larger numbers. I also entered matching numbers in the Schedule A, line1b.  But I continue to get the message stating I should make the appropriate entry in the Schedule A.

How do I resolve this as the last entries I need to correct to complete the return?

[DawnC]

The 199A (Qualified Business Income Deduction, QBI) is not reported on Schedule A - can you provide some more details if the link below does not solve your issues?  

How do I claim the Qualified Business Income Deduction as a Schedule K-1 Recipient?      @jimmieslade14426