non-resident Alabama tax return when receiving an AL Department of Revenue Final K-1 Form 65, final partnership return

[curt504]

Hi, I sold a business located in AL,  a GA resident, got an AL K-1 (form 65) from the accountant.  TT  AL state adding a k-1 does not ask questions or create a form 65 in forms view for me to transfer the numbers off the k-1/form 65 I got into the TT AL return??

Any helps for the numbers in my k-1 (looks different then the Fed k-1);  Part III fields?

This is TT home&business 2021.

Tnx curt

[PatriciaV]

Please clarify if you also received a Federal Form 1065 Schedule K-1 for this partnership. Generally the information for the State flows from the entries you make for your Federal return. BTW, Form 65 is the Alabama version of a Partnership return, not a form that would be in your personal return.

[curt504]

Yes, I was a member in a partnership (1065) that was sold.   I have a 1065 k-1 AND  a form AL 65 k-1, some duplicated numbers as on the 1065 K-1.   Given duplicated numbers if I enter both k-1 at the fed level I get 2x the income and cap gains.

So I deleted the AL k-1 at the fed level and in the AL state return you say add a k-1 and it does not go through the same field by field Qs.  It just asks;  income, just ONE field.   I then manually edited the AL return with the AL k-1 part III  field K capital gain.   I feel my hacking/guessing the AL return manually has missed correct entry from the AL only K-1.

[PatriciaV]

You should not need to enter any information from the Alabama K-1 that is already reported on the Federal K-1. Do not add a K-1 to your Alabama State return. Instead, adjust the income categories on your state return where the AL K-1 is different.

[curt504]

Tnx Patricia,  I experimented, removed the AL K-1 gain/income fields.  The AL tax due droped to near zero.  The Fed k-1 info did not flow.

BUT I maybe in a special scenario that TT does not handle.  This is a sale of a business located in AL, but I live in GA, and AL levies its OWN (significant) cap gain tax on businesses sold in state.  IE this sale and some income is located in AL and subject to AL taxation, not GA and the Fed is handled by the 1065 k-1 entered at the Fed level.

The Fed 1065 k-1 does not have a per state sub-fields and not sure if the k-1 form is designed to handle that and the TT 1065 k-1 questionaire did not ask what state the business is located in.  

The business 1065/k-1/AL k-1 was produced by a CPA with terse instructions to enter the AL k-1 ONLY at the AL state return level.

You might understand that CPA instructions might be easier heard then actually implemented.   I just guessed, directed edited some AL forms blabla and got the AL taxes due equal to what the CPA suggested they should be.  I'm forced to just run with my current entries.

This thread hopefully is a help to others with unique per state taxes that don't flow from the Fed k-1.

Thanks all and good luck filing!!!