K-1 with values in Part III Box 1 and Box 2 - Expert Answers Differ- Need Definitive Answer

[WSO]

I have read answers from multiple experts on how in TT need to use 2 K-1s for a K-1 with values in Part III Box 1 (BI) and Box 2 (RE).  The expert answers differ on which of the other boxes in Part III (4 to 20) should be put into the two K-1s (two examples below).  Would appreciate a tie-breaking (definitive answer?) for which K-1 to put values in box 4-20).

One TT Expert (AliciaP1) says to create one K-1 for Box 1 (BI) and include ALL boxes 4-20 with values, except for Box 17 or Box 20 containing Section 199A info.  In the second K-1, she says enter Box 2 value (RE income/loss) and ONLY enter Box 17 or Box 20 Section 199A info.  (I am assuming she means by 199A info Box 20, Letter Z?)

https://ttlc.intuit.com/community/taxes/discussion/how-to-input-schedule-k-1-if-boxes-1-and-2-have-v...

Another TT Champ (Tagteam) says that on the K-1 with Box 2 info (RE), should also enter Boxes 9c and 10 values 

https://ttlc.intuit.com/community/investments-and-rental-properties/discussion/my-k1-has-amounts-in-...

There are other TT responses with slightly different answers.

So for a K-1 from an LLC partner that has box 1 and box 2 values, can someone list which boxes 4-20, should be in the K-1 with the Box 1 value and which boxes should be included in the K-1 with the box 2 (RE) value

[tagteam]

You have my answer already (I think) so I'll page Champ @Mike9241 for another point of view (if his differs).

Understand that this is basically a TurboTax issue as some other tax preparation software providers do not require the same procedure.

[Mike9241 · Accepted solution]

I can only give generalities because the correct answer in some cases depends on the nature of your partnership activities and the natur of what the partnership itself is doing

lines 4 thru 10,13,15,16,18,19 can go on either K-1 but note that a 1231 gain is not included in the QBI calculation by a 1231 loss is

which K-1 items go depends on their nature. some can go on either k-1 

line 12 goes on the activity that the deduction relates to

line 14 only the business k-1

line 17 can relate to rental line 2 or royalties which would go to schedule E page 1

lie 20 is all over the place except for 20Z which really doesn't get entered on line 20 in Turbotax because it has a special line 20Z with a quicklink in forms mode to enter the QBI info.

if you are a limited partner or LLC member that is noot a mmember manager then the business income loss can be passive which would flow to form 8582,. A member manager in an LLC would make the business income /loss line nonpassive

not the same with rental real estate under IRC 469 (except for real estate professionals or when the self-rental rules apply) rental income/loss is passive 

so it's possible that for some taxpayers the business items would be used in computing QBI but passive rental losses would only be taken into a/c to the extent they are allowed for regular income tax purposes

however, your situation seems to be different in that it appears that the rental activity was disposed of in a fully taxable transaction. in such a case the rental activity is not passive and nothing from this activity should be flowing to the 8582.  as a side note if you have suspended passive losses for the real estate activity, it may be necessary to indicate on that k-1 that you disposed of your interest so any suspended losses will be allowed.

 as to 9c and 10 as stated it doesn't matter. line 10 flows to schedule D line 11a and the 1250 recapture flows to schedule D line 19.  neither effect the QBI calculation or allowable passive losses. 

[WSO]

Very helpful. Thank you