The information presented on Schedule K-1 (Form 1065) Part II Items K2 - N are for the partner's use only. These items either do not affect your taxable income or are needed for other areas of your return. For this reason, TurboTax does not include entry screens for these items.
Item K2
If the box in Item K2 is checked, the upper-tier partnership has allocated to its partners its share of the lower-tier partnership's liabilities.
Item K-3
If a partnership has checked the box in item K3, this indicates that you or a person related to you has a payment obligation with respect to the partnership's liabilities. The attached statement for box 20, code X, reflects the ending balance of each payment obligation that was included in the aggregate amount reported in box 20 under code X.
Item M
If you’ve contributed property with a built-in gain or loss during the tax year, the partnership will check “Yes.” Also, the partnership will attach a statement showing the property contributed, the date of the contribution, and the amount of any built-in gain or loss. A built-in gain or loss is the difference between the FMV of the property and your adjusted basis in the property at the time it was contributed to the partnership.
Item N
If you're allocated a share of section 704(c) gain or loss, the partnership will report your net unrecognized section 704(c) gain or loss both at the beginning and at the end of the partnership's tax year in item N.
The partnership is providing this for your information. If the partnership disposes of the property or there are special allocations due to depreciation, depletion, or amortization, the partnership will report these items on other parts of Schedule K-1.
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