How to calculate section 199A items for box 17, code V?

[sel56]

I'm trying to determine how to calculate the number to put in box 17 for code V of a Schedule K-1 (Form 1120S).  Historically the form mailed to me each year for the K-1 entity has provided a single number.  This year the form said for code V:  "STMT".  The "STMT" sheet provides amounts for Ordinary Income (Loss), Section 179 Deduction, W-2 Wages, and Unadjusted Basis, but no final number to enter.  Can someone help me determine how to calculate an appropriate single number, or provide a reference I can use to calculate the appropriate number?

[JamesG1 · Accepted solution]

With the exception of Section 179 deduction, the items that you mention are all related to the computation of the Qualified Business Income Deduction (QBID).  This year, there were changes in the way some of these items were reported on the 1120S K-1.

Below is an overview and also see this IRS publication.  But you need to acquire the detailed STMT information from the person who generated the 1120S K-1.

An S-Corporation is required to report to its Shareholder(s) on the Schedule K-1 (Form 1120S) - Shareholder’s Share of Income, Deductions, Credits, etc., the information needed for the shareholder/owner to calculate any QBID. The S-Corporation reports this information on the Schedule K-1 (Form 1120S) in Box 17, Code V through Z. It is this information from Box 17 of the Schedule K-1 (Form 1120S) that should be used by the Shareholder to calculate any 199A Deduction on their individual return. The Box 17 information that is used in the QBID calculation is the following:

Section 199A income –the amount reported is generally defined as the income (or loss) that is related to the corporation's business activities. It should not include investment income, or the reasonable compensation paid to the shareholders for services rendered to the corporation.

Section 199A W-2 Wages – the amount reported is generally the wages paid by the corporation that were reported to the Social Security Administration on a W-2, as well as any elective deferrals and deferred compensation. Rev. Proc. 2019-11 provides additional guidance on how to calculate W-2 wages for purpose of Section 199A.

Section 199A unadjusted basis – the amount reported is the unadjusted basis of qualified property held by the corporation. Qualified property is generally defined as (1) the original cost of assets that were placed in service by the corporation in the past ten years and still used by the corporation and (2) the original cost of assets still being depreciated by the corporation because the recovery period is greater than ten years.

[kzigmant]

At the end of K-1 Entry, 

[aymeesmiles27]

So, does that mean that for box 17 Code V, I would add the section 199A values for: ORDINARY INCOME(LOSS), CHARITABLE CONTRIBUTIONS, W-2 WAGES, UNADJUSTED BASIS? I would use the sum of these values? 

[JamesG1]

At the screen Enter box 17 info, select V-Section 199A information in the drop-down menu and the amount for each individual V-Section entry.

The 199A information will also need to be entered at the screen We need some information about your 199A income to compute the QBI deduction.

[dq7133]

Hi @JamesG1,

How would you handle a situation where Section 199A has information in Column A and Column B.

Column B refers to a pass-through entity.

Under "Enter box 17 Info" I've tried setting up two separate V codes from the dropdown selection, but the system is only asking me for additional information for one. It doesn't seem to recognize the second one. 

Thanks!  

[Penguin87]

Like previous comment, I have Col A, B, C and D (4 businesses - 1 main business A that owns a stake in 3 other businesses B, C, D).  I can't get TT to ask me about anymore than ONE of those businesses and, those businesses are NOT qualified for aggregration.  I have no idea how to separately enter the 199A information for 4 separate (not SCH C) businesses.

[DaveF1006]

 You can prepare separate K1's for each business in Box 17. You would enter the original K1 all the information on it including information in Box 17.

Then enter three more K1's with the name of the S Corp ein, etc but just enter the information in Box 17 in those remaining three K1's.

[Penguin87]

Yes, after a lengthy discussion with TT support, that is the workaround that was suggested.  I believe that does "work", but CLEARLY TT needs to streamline that process and at the very least make it clear(er) somehow/somewhere.  There is NO WAY that anybody would arrive at that solution on their own.  Even the result is VERY confusing to look at... think about it...  My wife and I both get a K-1 from the main business, and that business has 3 OTHER businesses (listed inside box 17...for a total of 4 businesses).  That means under my K-1s, I now have 8 of them. (4 businesses x 2 people that get K-1s).  They are ALL THE SAME NAME... TT doesn't even discern them by who they are for (wife or myself).  All because there isn't better handling for the 199A stuff.   Better hope you don't need to go back and look at or change anything in your K-1...  takes 10 min to click into each of them to know which one you need to look at.  Point is...  TT... Please try to streamline that process for next year!!...  not really acceptable to handle it this way.   Dealing with this one issue has at least doubled my time that it takes me to do my entire 1040 with TT.

[dyad]

Hi! Did you get an answer to your question?  I have the exact same question and I do not understand the other replys to your question.

[DaveF1006]

Here is the order that should appear in your return in Box 20

1. if there is a Z, select Z in the drop down and leave the $ blank.
2. Next screen asks about the risk.  indicate you are at risk
3. Then there will be a screen that appears that says, We see that you have 199A income.Here you have three choices to make.  pick one that is applicable to you.
4. Next screen will say we need some information about your 199A income. Here you will see those entries appear with check boxes along side them. When you select those boxes, drop down will appear and you can enter the $ amounts for each of those entries.

[Luke Knight]

When I try to inout the code next to Box 17 there is no option for code v. How can I choose code V?

[DavidS127]

Check to make sure you selected the correct Form 1120S (S Corp) Schedule K-1 to enter, and not a Form 1065 (Partnership) or Form 1041 (Estate/Trust) Schedule K-1.

To get back to the K-1 summary screen and find the Schedule K-1 you started, click the "magnifying glass Search" icon on the top row, enter "k-1" in the search window and press return or enter, and then click on the "Jump to k-1" link to find the K-1 you are working on.  If you find you started a K-1 for something other than your S Corp, you'll need to delete that one and start a new K-1 for an S Corp.

For the Section 199A information associated with box 17 code V for a S Corp Schedule K-1, enter the code V when you enter the K-1 box 17 screen, but you don't need to enter an amount.  Continue on, and you'll find the "We need some more information about your 199A income or loss" screen.  This screen must be completed with the numbers from your Section 199A Statement or STMT.   

When you check the box next to a category on that screen, a place will open up to enter the amounts from the Statement or STMT that came with your K-1.  The applicable category (or categories) on this screen (and the following "Let's check for some uncommon adjustments" screen, if applicable) must be completed in order for your K-1 QBI information to be correctly input into TurboTax for the federal tax return.

Here are screenshots of the two screens to enter your Section 199A Statement/STMT information:

@Luke Knight 

[Edited 6/20/2020|1:31pm PST]

[tkproperties]

I am trying to E-file my 1040 and in the final review, keep getting sent to the K-1 line 17 V code.  It says "*STMT on line 17, but shows no Section199A income".  I used TurboTax Business to do my S-corp tax return, including the K-1's.  Stmt A - the QBI Pass-through Entity Reporting form, attached to the K-1 shows Box SSTB checked, and shows the following amounts - Ordinary Loss -$1525, Section 179 deduction $0,  W-2 Wages $4012, and UBIA of Qualified Property $8567.  There is nothing showing for Section 199A dividends.   What amount am  I supposed to put in line 17 of the K-1.  I have tried listing all of these catigories/amounts in the drop down and continue to be sent back when I try to e-file?   Very frustrating!  Why doesn't TurboTax input this information?  PLEASE HELP?

[JamesG1]

Thank you for the detail.  Here are my thoughts.

The SSTB (specified service trade or business) designation reduces or eliminates the 20% qualified business income deduction at higher income levels.  Please see this TurboTax Help.

An Ordinary Income Loss of -$1,525 would not qualify you for a Qualified Business Income Deduction because there is a business loss, not business income.

If you were to report net income at the screen Enter Income or Loss from Box 1, then I would expect to see:

• V-Section 199A information and the income amount at the screen Enter Box 17 Info, and
• At the screen We need some information about your 199A income:

1. Ordinary business income,
2. W-2 wages for this business, and
3. UBIA of qualified property for this business.