Turbo tax DeLuxe, Sale of Land and Schedule K-3

[drjbos46]

I am using Turbo Tax Deluxe and having difficulty processing a land sale transaction.  I have tried "Income Summary" to "Investment Income" to "Stocks, Mutual Funds".  Here Turbo Tax only handles Form 1099-B and mentions nothing about handling 1099-S which I received from the Settlement Company.  Next, I tried "Less Common Income" to "Sale of Home" and here Turbo Tax does deal with Form 1099-S but all the questions it poses are related to Home Sale - such as Primary Home, Vacation Home, How long I lived in the home etc.  I am having difficulty answering these questions because this is just an unimproved plot of land.

The second problem I am having with Turbo Tax Deluxe is in processing Schedule K-1 I received from a partnership.  This Schedule K-1 came with Schedule K-3 (both are Form 1065) and the Turbo Tax Deluxe program is unable to handle it. After completing Schedule K-! data entry it displays the following message.

"Is box 16 checked on your K-1?

You've done a great job starting your taxes early, but the IRS is still working on finishing up the Schedule K-3 for 2021.  That means this area isn't quite ready yet.

Check back soon and we'll help you finish up.

Let's keep working on other parts of your return."

Huh....?  Today is March 19, we're about a month away from the filing deadline and Turbo Tax says "this area isn't quite ready yet"?

I checked IRS website and it has posted Schedule K-3 (Form 1065) and Instructions as shown below.

"Schedule K-3 (Form 1065), Partner's Share of Income, Deductions, Credits, etc.-International

Schedule K-3 (Form 1065), Partner's Share of Income, Deductions, Credits, etc.-International

Forms and Instructions"

So, I don't understand why Intuit isn't able to update Turbo Tax right now!

I called Turbo Tax and a representative suggested that I upgrade to the Business version and it may be able to correctly handle both of my issues.

Any ideas from the Community will be deeply appreciated.

Thank you.

[HelenC12]

Please clarify. Are you using TurboTax Online or the CD\Download version?

Thank you.

[drjbos46]

Thank you Helen C.  I am using the desktop version I installed from a CD.

[JamesG1]

To report the sale of the unimproved land in TurboTax Desktop Deluxe version,

• Enter '1099-sale of home' in the magnifying glass Search in the upper right hand corner of the screen.  Enter. 
• Click on 'Jump to sale of home'.

The entry is awkward because you are not selling a home.  But the questions do ask whether you received an IRS Form 1099-S.  Enter Yes.

The sale will be reported on IRS Form 8949 and Schedule D.

K-3 reporting is unclear.

The IRS announced on February 16, 2022 that most K-3 reporting for 2021 can be delayed until the 2022 tax return filing, but they have not indicated how individual taxpayers should proceed.  

This is an extract of the IRS announcement:

"The IRS intends to provide certain additional transition relief for this year from the Schedule K-2 and K-3 reporting for certain domestic partnerships and S corporations with no foreign activities, foreign partners or shareholders, and without knowledge of partner or shareholder need for information on items of international relevance. For 2021, these qualifying domestic partnerships and S corporations will not have to file the new schedules. We are taking this step in response to feedback we received from the tax community and our stakeholders.  The IRS will provide full details of this relief soon."

Some are choosing to "uncheck" the box indicating that a K-3 is attached so you can file now.  But in that case, you may need to amend your tax return at a later time.  

See also this IRS FAQ.

[drjbos46]

Thank you so very much, James.  You provided me with a very detailed answer regarding the Sale of Land question.  I am still unsure of how to handle the Schedule K-3.  As you have mentioned in the last sentence I may decide to "uncheck" the box indicating that Schedule K-3 is attached and whenever IRS/Turbo Tax complete the update process file an amended return.

Under the circumstances, you have provided the best answer you could and I really appreciate your help.

R. D.