How to report box 20AH from Schedule K-1 Form 1065 in Turbotax?

[Fou65000]

Hi, on my Schedule K-1 form 1065, in the Supplemental Information, I have among other things these codes:
20AH1    Gross Income                                              11
20AH2     Current Year Federal Bonus Amount     1

I entered these codes and their values in the K-1 Worksheets during the turbotax interview on the page titled "Enter Box 20 Info" like this:

AH - Other Infirmation 11
AH - - Other Infirmation 1

Then, on the next page titled "Enter Box 20 Code AH Amounts", I have entered the info for 20AH1 and20AH2 in Other descriptions like this:

Is it the correct way to report these boxes 20AH1 and 20AH2? Should I do anything else with it?

Thanks for your help!

[nexchap]

Many of the supplemental line 20 codes are for specific tax situations, and the codes used by different partnerships are not uniform.  The K-1 fine print will usually have more details about what's being reported if the description isn't self-explanatory.  You then need to dive in and figure out if the numbers are applicable to you.

For example, 'Current Year Federal Bonus Amount' probably refers to Bonus Depreciation that's included in the Box 1 'Business Income'.  If you live in a 'non-conforming' state (you can google to establish whether your state is or isn't), then the K-1 will need to be adjusted by that amount in your state taxes.  TT is probably not going to do this automatically for you.

As to how TT handles all this, if you look at the K-1 Worksheet form itself, some codes will have * footnotes telling you that TT isn't doing anything with the information and you have to handle it yourself.  This applies not only to line 20, but other areas of the K-1 itself (e.g., 13K).  Also, in general, if you're typing in a description yourself, TT isn't doing anything with the info.

[Fou65000]

Thanks a lot for your response. 

I have another K-1 1065 with this box 20AH1:

Gross Receipts 31

I have no idea what to do with this number. Would you know what it is and where it should be entered?

Also, in another K-1 from another MLP:

Gross Receipts for Unrelated Business Taxable Income Purposes         103
Gross Deductions for Unrelated Business Taxable Income Purposes    119

Any idea for these two?

Thank you!

[nexchap]

Unrelated Business Taxable Income (also abbreviated to UBTI) is an alternate set of rules for tax exempt investors who invest in partnerships.  So those entries would be relevant if you held this investment in an IRA, or are filing taxes for a charity, but probably not otherwise.  Here's a link to the IRS UBTI page: https://www.irs.gov/charities-non-profits/unrelated-business-income-tax

If this doesn't affect you, then you have no need to enter this into TT at all.

"Gross Receipts" is vague, but aside from UBTI I'm not aware of another situation where the average individual  would need to enter or care about "Gross Receipts".  But I'm also far from an expert on all aspects of partnership taxation, so if there's anything complicated about your return / situation you may want to consult a tax preparer to see if you need to account for this.  But similar to UBTI, entering '31' into the K-1 interview isn't necessary and won't do anything.  You'd have to find out if you need to use the number, and where, first.

[Fou65000]

Thank you, this is really helpful.

In my first post, there was also a 20AH1  Gross Income 11.
Do you think that this is similar to Gross Receipts seen in other K-1s?

Also, I am paying tax in a non-conforming' state. Does the Bonus Depreciation Adjustment for Most Non-Conforming States amount means that it will lower my taxable income for this state? If I don't know how to handle this in TT and it is only 5$, can I just ignore it? (even if I miss a 5$ tax credit but that's not too bad).

Thanks a lot!

[nexchap]

@Fou65000 'Income' is usually referring to profits, while 'Receipts' is usually referring to revenue.  

As to Bonus Depreciation, it may lower or increase taxes because it can be positive in some years and negative in others.  If you're going to continue with MLPs, you'll want to figure out how to handle it in your state filing, since it will show up every year and, when you sell, there will also be an adjustment to the Ordinary Income reported in the state (because the amount of Ordinary Income reported by the partnership also changes with depreciation).

[Fou65000]

Thank you nexchap for your answer!

I actually bought and sold all my shares of MLPs in 2020 and considering how difficult it is for novices like me to report K-1 forms, I am not planning to invest in MLPs anymore, at least in the near future!

As for the MLP whose K-1 form has the following line:

20AH1: Bonus Depreciation Adjustment for Most Non-Conforming States: 5

I have this corresponding Sales Schedules:

It seems like the 5$ difference between the Cumulative Adjustment to Basis (-34) and Ord Income (27) after Adjustment for Bonus Depreciation and the original Cumulative Adjustment to Basis (-39) and Ord Income (32) corresponds to the 5$ of 20AH1: Bonus Depreciation Adjustment for Most Non-Conforming States.

Therefore it seems that my cost basis is higher for state taxes and my Ord income lower? If I don't correct in my state taxes and use the numbers of my 1040, I will therefore pay a little bit more for my state taxes? That's what I meant earlier by ignoring it for my state taxes, even if it means paying a little more than what I should pay. Does it make sense?

[nexchap]

@Fou65000 You're correct.  Not adjusting your state taxes will have you report $5 more in Ordinary Income, and $5 less in Cap Gain.  So you're not underpaying taxes.  It certainly doesn't seem like its worth the hassle, but that's certainly not tax or legal advice!

[Fou65000]

Thank you!