I entered a long term mortgage that is a Recourse liability on the Balance Sheet section of the TurboTax Business; however, it is mapping it to Qualified Non-recourse Financing on Section K of the Schedule K-1. This is not correct according to my accountant. How do I go about getting this corrected?
THanks, DJA
If you need this mortgage to be reported as a Recourse Liability, the amount should appear on line 20 (Other Liabilities) column b. (Unless this is a loan from a partner, which should be shown on Line 19a, and is considered a recourse liability by default.)
To report this mortgage, click the magnifying glass to the left of the description box on Line 20. This will bring up the "Other Liabs" supplemental form to allow a description and the beginning and ending balance of the mortgage. The amounts you enter here will flow to Schedule L Line 20.
Nonrecourse liabilities are allocated to all partners according to their profit percentage. Other liabilities are allocated only to general partners according to their loss percentage.
Note for Limited Liability Companies: Recourse liabilities, entered or calculated to the Partner's Liabilities Smart Worksheet, page 6, line D, will NOT be allocated to members unless a special allocation code is entered. Enter a special allocation code ("P" for Profit percentage, "L" for Loss percentage, "O" for Ownership percentage, or any other valid code) in the column to the left of the amount.
Thank you. It took a long time for me to figure out, but I finally did. I placed an "O" in thelittle box next to the mortgage amount on this worksheet and also selected that the partners where all liable for the debt. The Recourse Liabilities are now correctly reported.
Thank you