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Returning Member
posted Mar 20, 2020 9:39:40 AM

What should I do if the description of expenditure on my K-1, Section 59(E)(2) expenditures Box 13, Code J, doesn't match the options available in TurboTax?

My K-1 description says "Sec 59(E)(2) expenditures from passthrough entities". I didn't receive any other attachments explaining those passthrough entities. TurboTax won't let me move forward unless I select one of the following: circulation expenditures, intangible drilling costs, research and experimental expenditures, mining exploration expenditures, or mining development expenditures.

0 5 3385
5 Replies
Expert Alumni
Mar 20, 2020 10:43:47 AM

On an attached statement, the partnership should have told you the type and the amount of qualified expenditures for the section 59(e) election. I suggest contacting whoever issued you the K-1.  Otherwise, make an educated guess based on what activities the partnership engages in or the name of the partnership.

Returning Member
Mar 10, 2021 11:10:03 AM

I can not find where to include my intangible drilling costs on my turnbo tax llc

Returning Member
Mar 10, 2021 11:19:49 AM

i am filling out my 1065 and there is no place to include intangible drilling costs to get the deduction so it can be passed along to K-1 holders.

Returning Member
Mar 10, 2021 11:22:02 AM

i was only issued a letter saying that my intangibles were 47500

Expert Alumni
Mar 10, 2021 5:27:01 PM

If you are preparing a business return in Turbo Tax, do the following to enter your intangible drilling expenses.

  1. Go to federal taxes>deductions>business expenses>all other expenses>start
  2. Here you can enter a description and amount for intangible drilling costs
  3. Now you can go to the forms mode and check statement A for each partner. The amount that distributed is the ordinary business income that is a net total of the income and deductions you have already reported in your return.