how do I report an error in TurboTax business

[mtandp]

I used TurboTax Business to create the tax return for an LLC with 3 members. One member left the LLC in April 2025. And the LLC was dissolved in June 2025. Now the K-1s that Turbo Tax created are wrong or at least confusing. Who can help me with that?  

[MelindaS1]

If you want to share more detail about what you expect to see on the K-1 and what you're seeing instead, you can post that in this thread and tag me @MelindaS1 and I or others in the Community can help you with your tax reporting here. 

If you want to go live with an expert, there are options for that. 

[mtandp]

Well, I have taken some screenshots and put them into a one-page Word document. Is there anyway to upload this, so you can see it?

[MelindaS1]

If you have screenshots, you can post them here using the little icon that looks like a camera in the edit window. Make sure you crop or use MS Paint so that no identifying information is visible. 

[mtandp]

@MelindaS1  - This should show the issue

[mtandp]

@MelindaS1 You see that that generated entries in the K-1s don't reflect the input. And you see that the the generated K-1 entries for the federal and the state tax are different - which is at least confusing. 

Please help me. 

[MelindaS1]

If you K-1 ending percentages aren't printing the values that you've input, it's most likely because the items of income, expense, and distributions aren't being allocated properly to that partner for the software to calculate the ending balance that you want. 

Revisit the Partner/Member Summary and the Member Capital entries, and make sure the values you've entered for beginning and ending capital actually equal the % share of the partnership total that ties to the face of the partner's K-1. 

Ensure that the beginning capital that partner starts with +/- any income received +/- any distributions or withdrawals taken, actually = the final % you want to see on the face of K-1. 

On the screen that says Basis Adjustment Election, make sure you've selected Yes, there was a distribution of property or a transfer of partnership interest so that the program knows that there needs to be an adjustment in the partner ownership %'s, and follow the prompts to enter those transfer details. 

You'll likely need to input those same Basis Adjustment details in both the federal and state input menus. Ensure that both have been entered mathematically and completely. 

[mtandp]

Hello @MelindaS1 , I spend quite some time today, trying to follow your advice and had no success. The final K-1 for the member who let the LLC still didn't show the right numbers. 

However, I believe I found more or less where the problem occurs: See the screenshot of the worksheet for the member who left the LLC

It shows, the correct Ending %. But when the K-1 is generated Turbo Tax picks up the value from the "*Inlt/Fnl" column which is the percentage just before the member left the LLC) and puts it as the Ending %. Maybe that is what's supposed to happen, but at least it's very confusing. 

Any thoughts from your side on this?

Thanks

Peter

[PatriciaV · Accepted solution]

Per IRS Instructions for Form 1065 Schedule K-1 Item J Partner's Profit, Loss, and Capital, "If a partner’s interest terminates before the end of the partnership’s tax year, enter in the “Ending” column the percentages that existed immediately before termination." According to this reference, TurboTax is reporting the correct percentages on Schedule K-1.

In the Step-by-Step interview when entering the percentages under Business Info >> Partner/Member Information on the page for Profit Percentages, these percentages reflect the profit allocations before and after the change. For example, a leaving partner might have a Before percentage of 25% and an After percentage of 0%. A new partner would then have a Before percentage of 0% and the After percentage of 25%.

Note that "after" percentage on this page is not the same as "ending" percentage on the K-1.