Schedule 3k-1

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Surprisingly, my former employer had an equity event in 2023. I had been granted shares as an employee and received a payout due to this event(I received proceeds minus the strike price). I have finally received the K-1 and 3k-1. In the Reconciliation of Partner's Capital Account, line 26, "Massachusetts net income for the year," is less than line 27, "Entire net income for the year." I am not sure why or how to report this. Do I answer "yes" when asked if there is a difference and then enter the difference as a negative number since it is less? I am worried because when the question is presented in TurboTax asking if there is a difference, a message says, "This is uncommon."

Also, on the federal return, should I answer that I disposed of part of my interest in the partnership due to this equity event? Not all shares were involved in this event.

Thanks!

Rick19744Answer

Level 13

I'm not exactly sure what question TT is asking or in what context:

It is very possible that the two lines do not agree
I would imagine that this happens in many cases, since line 26 is MA taxable only and line 27 would include all income both taxable and nontaxable income (if applicable), etc.
If there is a difference, then I would respond accordingly. Keep in mind that TT is prepared for the masses, but I certainly would not expect this to be "uncommon".
There are not sufficient facts to address your second question.

*A reminder that posts in a forum such as this do not constitute tax advice.Also keep in mind the date of replies, as tax law changes.

Anonymous_

Level 15

Rick19744

Answer

Level 13

I'm not exactly sure what question TT is asking or in what context:

It is very possible that the two lines do not agree
I would imagine that this happens in many cases, since line 26 is MA taxable only and line 27 would include all income both taxable and nontaxable income (if applicable), etc.
If there is a difference, then I would respond accordingly. Keep in mind that TT is prepared for the masses, but I certainly would not expect this to be "uncommon".
There are not sufficient facts to address your second question.

*A reminder that posts in a forum such as this do not constitute tax advice.Also keep in mind the date of replies, as tax law changes.