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1065 Sch K-1 Box 20 Code Z with STMT

On my 1065 Schedule K-1, I have code Z in Box 20 with STMT.  However, when I review the attached K-1 statement , I see two lines of entry for code Z: there's an amount for "ordinary income" and a separate line for "unadjusted basis." Which of these should I enter for code Z in Turbotax for my individual tax?

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Accepted Solutions
PatriciaV
Employee Tax Expert

1065 Sch K-1 Box 20 Code Z with STMT

Leave the amount box blank for Box 20 Code Z until you are asked about Section 199A income. TurboTax will provide entry boxes for both income and UBIA on a subsequent screen.

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5 Replies
PatriciaV
Employee Tax Expert

1065 Sch K-1 Box 20 Code Z with STMT

Leave the amount box blank for Box 20 Code Z until you are asked about Section 199A income. TurboTax will provide entry boxes for both income and UBIA on a subsequent screen.

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phsch529
Returning Member

1065 Sch K-1 Box 20 Code Z with STMT

I have a similar situation and I left the box empty.  Later TurboTax did present me with a list of items concerning my 199A income but none of them applied.  At the final check TurboTax keeps wanting me to enter something.  I don't know what to enter.....

DaveF1006
Employee Tax Expert

1065 Sch K-1 Box 20 Code Z with STMT

Usually the supplemental statement that came with your K1 will supply all the information you need to the record the information needed. Here is a list of things that should be in the supplemental schedule to report in Box 20.  The black stripes in the image blot out actual numbers that would normally appear in this section.  

 

If you don't have a supplemental schedule that reports this information, go back and uncheck Box 20.

 

@phsch529 

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phsch529
Returning Member

1065 Sch K-1 Box 20 Code Z with STMT

Yes, I get to this page but I don't think any apply.  I don't have a supplemental schedule, I  have a statement, the same as the original question.  My partnership is in rental properties.  Would this income count as business income (loss)? 

JamesG1
Employee Tax Expert

1065 Sch K-1 Box 20 Code Z with STMT

If your IRS Schedule K-1 (1065) includes code Z Section 199A information in box 20, the preparer of the K-1 has identified the income as section 199A income and should provide a statement of the section 199A items to be reported.

 

IRS Form K-1 (1065) Partnership Instructions page 29 states:

 

Code Z

 

Section 199A information. Generally, you may be allowed a deduction of up to 20% of your net qualified business income (QBI) plus 20% of your qualified REIT dividends, also known as section 199A dividends, and qualified PTP income from your partnership. The partnership will provide the information you need to figure your deduction. Use one of these forms to figure your QBI deduction.

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