How to enter Maryland LLC K-1 and Maryland Estate K-1 into Pennsylvania State Tax return

[oferc141]

I am a Pennsylvania resident and I have a final Maryland Estate K-1 and a Maryland LLC K-1 that I am trying to enter into my Pennsylvania Tax return.  I can't figure out how to enter these in Turbotax correctly.  I could not find where to enter the Maryland Estate K-1 at all.  The estate k-1 is properly entered into the federal tax return.  The Maryland LLC K-1 is for a rental property in Maryland.  Turbotax wants to create an RK1 Partnership document, though the LLC is based in Maryland with all earnings and losses in Maryland.  I was able to successfully create the MD nonresident tax return.  Turbotax is also trying to create a PA schedule C "Profit or loss from business profession" which I don't believe applies.  It is also trying to create a PA schedule E "Rents and royalty income (loss)" which also doesn't apply since the rental property is in MD, not PA.  Please help.

[PatriciaV]

After entering the Maryland K-1s on your federal return, you will need to work through the nonresident Maryland return to make any adjustments necessary under the business section of that return. Adjustments are not common, but you may need to answer questions about the source of the K-1 income.

You will also need to work through your Pennsylvania return for the same reasons. K-1 entries should not cause your home state to convert that income into business or rental income for PA. Be sure you indicate that all income is sourced in Maryland.

If you're not able to resolve this yourself, consider upgrading to TurboTax Live. This online service provides step-by-step guidance from a tax expert whenever you need assistance, either over the phone or by screensharing.

[oferc141]

Patricia, thanks for the response.

In the meantime, I already contacted intuit support, because turbotax kept creating a PA RK-1 from the information I submitted.  The software tech rep couldn't figure out a solution and connected me to an intuit CPA.  Working online with the CPA, we deleted the Schedule C and Schedule E.  Turbotax kept trying to recreate the Schedule C, and then we manually opted the checkbox on the form to "not include" the Schedule C.  We also allowed the software to create the PA RK-1, though since the K-1 was for a general loss for the year, it was never included in the printed submission paperwork.

A larger question that was answered was that the MD LLC only generates a federal and MD K-1, no generation of other state K-1s.  The step-by-step instructions to include a K-1 in the PA return is incomplete and unclear.  It definitely could use improvement.  The fact that PA creates its own version of the RK-1 within turbotax is very confusing.  There is no explanation or guidance in the step-by-step on how to include an out of state earned income from an out of state K-1.

I'm including this information for anyone else that runs into the same issue.