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How to input Schedule K-1 if boxes 1 and 2 have values and different entities in Schedule K-1, Box 20, Code z?

I have a K-1 that have values in boxes 1, 2, 17, 19, 20. I read that I need to need to split this K for box 1 and 2. But I also have 3 entities in Statement A—QBI Pass-through Entity Reporting (Schedule K-1, Box 20, Code Z). One is the "main" entity issuing the K-1 and another 2 entities with no EIN number that have rental income (loss). I'm a bit lost in how many K-1 I need to break this into? And where should I report the 19 distributions.

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1 Best answer

Accepted Solutions
AliciaP1
Expert Alumni

How to input Schedule K-1 if boxes 1 and 2 have values and different entities in Schedule K-1, Box 20, Code z?

If your Schedule K-1 has multiple boxes completed (1 and 2 and/or 3) you will complete the business column of your Section 199A Statement with your box 1 income and then you will enter another K-1 with the other box (2 or 3) and the pass-through entity Section 199A information.  Once you have entered the first K-1 and completed the whole interview, you will be returned to the Tell Us About Your Schedules K-1 screen where you can click Update for the type of K-1 you have and on the Summary screen Add another K-1.  Only enter the other income box (2 or 3) and the box 20 or 17 Section 199A information on the second K-1 and do not enter any other box information on this additional K-1.

 

@Gustavo B 

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8 Replies
RobertB4444
Expert Alumni

How to input Schedule K-1 if boxes 1 and 2 have values and different entities in Schedule K-1, Box 20, Code z?

You only need to split this into two different K-1's.  The first K-1 uses the same information as on your form and then only needs the information that is in box 1.  The second uses the same information as on your form and has all of the rest of the information.  The rental income from the other entities listed on your statement should be aggregated on the original K-1 form in box 2 so you are reporting total rental income (loss) by entering that number.

 

@Gustavo B 

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How to input Schedule K-1 if boxes 1 and 2 have values and different entities in Schedule K-1, Box 20, Code z?

Should the values in Statement A—QBI Pass-through Entity Reporting (Schedule K-1, Box 20, Code Z), line Rental income (loss) add up to the box 2? Because in my form, it doesn't.

How to input Schedule K-1 if boxes 1 and 2 have values and different entities in Schedule K-1, Box 20, Code z?

Also,

 

TurboTax asks if the business that generated the section 199A income a separated business owned by the partnership. I would think yes, because it listed properties in the Statement A—QBI Pass-through Entity Reporting. If I say yes, it only let me fill one entity.

AliciaP1
Expert Alumni

How to input Schedule K-1 if boxes 1 and 2 have values and different entities in Schedule K-1, Box 20, Code z?

Not necessarily, not all income reported as rental income is QBI income.  There may be some income that doesn't qualify based on how the business runs the rental creating the income or based on your ownership structure of the property.  See Can I get the QBI deduction for more information.

 

@Gustavo B 

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AliciaP1
Expert Alumni

How to input Schedule K-1 if boxes 1 and 2 have values and different entities in Schedule K-1, Box 20, Code z?

If your Schedule K-1 has multiple boxes completed (1 and 2 and/or 3) you will complete the business column of your Section 199A Statement with your box 1 income and then you will enter another K-1 with the other box (2 or 3) and the pass-through entity Section 199A information.  Once you have entered the first K-1 and completed the whole interview, you will be returned to the Tell Us About Your Schedules K-1 screen where you can click Update for the type of K-1 you have and on the Summary screen Add another K-1.  Only enter the other income box (2 or 3) and the box 20 or 17 Section 199A information on the second K-1 and do not enter any other box information on this additional K-1.

 

@Gustavo B 

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How to input Schedule K-1 if boxes 1 and 2 have values and different entities in Schedule K-1, Box 20, Code z?

Hi @AliciaP1 ,

 

Thank you. Suppose I have -108 Net rental real estate income (loss) (box 2) on the main K-1 form and I have on the Statement A—QBI Pass-through Entity Reporting (Schedule K-1, Box 20, Code Z), -130 in Rental income (loss) line for Entity A and -63 in Rental income (loss) line for Entity B. First time I fill with box 2 info, I report the -130 for entity A. Then when I add another K-1, to add the info about Entity B, what should I put in box 2? Leave it blank?

AliciaP1
Expert Alumni

How to input Schedule K-1 if boxes 1 and 2 have values and different entities in Schedule K-1, Box 20, Code z?

Yes, leave all boxes but box 20 unchecked and blank on the second Schedule K-1 entry.

 

@Gustavo B 

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WSO
Level 3

How to input Schedule K-1 if boxes 1 and 2 have values and different entities in Schedule K-1, Box 20, Code z?

I follow your instructions to only enter box 2, 17 and 20 in the 2nd K-1.  Question, for the first K-1 (with box 1 busn income), do you include box 17 & 20 values? (you stated to complete the ENTIRE interview for the 1st K-1). Thank you

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