How do I enter K-1 line 20 code AJ information?

[eshemesh]

Code AJ is not a choice for line 20 of the desktop K-1 input form.  How do I enter Excess Business Loss Limitation information from my K-1 Partner?

[PatriciaV]

Schedule K-1 Box 20 Code AJ is new for tax year 2023. TurboTax has not released the updated forms for this year, which is why you are seeing an out-of-date K-1 in TurboTax for Desktop.

According to the Forms Availability Table, Schedule K-1 is expected to be released on February 21, 2024. Because updates are released after business hours Pacific time, we recommend that you wait until the next day to update TurboTax (if using the desktop version) then retry the K-1 entries.

[eshemesh]

Patricia, thanks for your reply and, yes, the TT update included a K-1 line 20 code AJ selection.  Unfortunately, the program does not provide further support for Excess Business Loss Limitation information, and I don't know what to do with it other than put it on line 20!  The IRS articles are unclear about this. 

[Do_It_Myself]

The program says to manually enter the info for K-1, Box 20, Code AJ.  Where or how do I enter it? I have two K-1s that have reported Code AJ info for Gross Income, Gain/Loss on Disp of Prop and Total Deductions.  Some guidance on where to manually enter this info would be appreciated. Thank you.

[Lalo86]

I am having the exact same issues. Please shed some light on this @TurboTax

[PatriciaV · Accepted solution]

The information reported on Schedule K-1 Box 20 Code AJ will be used only if your net losses from all businesses are more than $289,000 ($578,000 if filing a joint return). 

If that applies to you and you need to enter this manually, you will need to use Forms Mode (available only in the desktop versions of TurboTax). You may also need to manually complete the related Form 461.

See also: 

• IRS Instructions for Form 1065 Schedule K-1 Box 20 Code AJ
• IRS Instructions for Form 461 - Limitations on Business Losses

@eshemesh 

@Do_It_Myself 

@Lalo86 

[jeffm5]

I see code AJ in the dropdown, so that's a good first step. 

However on the K-1 I received, the value for code AJ consists of 2 line items in a supporting statement (similar code Z, which has a supporting statement with multiple line items). In TT I am eventually asked for and can enter the various components of code Z, but don't see where I can do so for code AJ.  

As a separate question, if my aggregate losses are under the threshold, can I just leave the value for code AJ blank and move or will that cause a problem elsewhere? 

[PatriciaV]

If your aggregate losses are under the threshold, you may skip entering Code AJ from your Schedule K-1.

@jeffm5 

[Lalo86]

After I subtract deductions from gross income I have a positive $1305 left in gross income between my wife and i’s schedule k-1’s. Do I still need to input code AJ or can I skip? @PatriciaV @GlemmaJ

[siraseranant]

Thank you very much for your answer. The loss was only for a tablet we use for our business which was only $2,000. We are a very small business.

Siraseranant

[PatriciaV]

If you have income, Box Code AJ would not apply to your return. In this case, you may omit the information from Schedule K-1.

@Lalo86 

[typeiierror]

Although the code AJ now appears in the forms section for box 20, entering an amount with that code triggers and inappropriate error. It classifies that entry as 'gasification' and wants supplemental information that doesn't apply.

I plan to ignore the error and submit the return anyway. Any other suggestions?

[PatriciaV]

As long as the amount from Line 20 Code AJ has the correct information on the Supplemental Statement A for the K-1 partners, you can ignore the "gasification" message. However, if Statement A references Code AS, you will need to wait until the K-1 updates are released. 

Sign up from this page to be notified when the form has been updated: Why am I receiving an error in TurboTax for Schedule K-1 Box 20 when code AJ is selected?

@typeiierror 

[edited 3/6/2024 | 1:46pm PST]

[kwall71]

I spent an hour and a half on the phone yesterday and still did not get a resolution.  I had to do the upgrade.  I may be able to get more answers here.  I am getting the basis of gasification message, asking for a facility number which I don't have and it won't take the Federal Tax ID number.  I have had to stop and walk away so many times because I can't get past this.

[CatinaT1]

This is on the IRS Known Issues Report. There is a workaround provided for this issue. If you enter ""TMXXX99XXXXX" on Line 2a, this will allow you to e-file.