K1 Box 13 Code ZZ deduction

[utelax34]

My Schedule K-1 (Form 1065) has Box 13 Code ZZ "Other deductions" with a dollar amount corresponding to the Pass-through entity tax (PTET) paid to Idaho. In the directions accompanying my K1, it states that the Box 13 Code ZZ  dollar amount is supposed to be deducted from my taxable K-1 federal income (it is a non-passive deduction).

The amount that I entered on Schedule K-1 Box 13 Code ZZ is not populating in the Schedule E Page 2 worksheet, therefore it is not being subtracted from the total income being reported on the federal Schedule 1 Line 10 and ultimately on federal Form 1040 Line 8. Where or how do I enter this to allow for this amount to populate on the Schedule E Page 2?

[Mike9241]

Turbotax bug which I assume they're working on 13ZZ and certain other items on box 13 (and other boxes) require additional info on a subform in Turbotax. The bug is they are not presented.  (13D is working today but may require closing the return and reopening it to see the screens for the subentries that are needed)  I have no idea when they'll fix the other boxes with this issue.  I use desktop and skirt the issue by using forms mode and entering that additional info directly. Forms mode is not available in any of the online versions - self-only  - not live prep 

[utelax34]

@Mike9241 I am using the desktop version as well.

If I go to forms mode and select K1P Addl Info 1, can I go to subheading "Code W to ZZ: Other deductions" and manually enter it on line 6 "Other nonpassive deduction to be reported on Schedule E, page 2" ?

This seems to allow me to include a description of the nonpassive deduction (which I can manually add) and have it applied to Schedule E page 2. I am not sure however if this is the correct way to report this deduction?

[kr071]

Hi, I had the exact same issue. I went into Addl Info 1 and manually entered on line 6. It correctly populated on Schedule E, p2 and carried over to Schedule 1 as negative income and also to 1040. Turbotax is missing this option during the EasyStep so, until they fix it, this is a workaround. I hope this is the correct approach for now!

[utelax34]

Still wondering how the turbotax experts would recommend I enter it into the desktop windows version.

[PatriciaV · Accepted solution]

The steps listed by @kr071 are correct at this time, as the result follows IRS instructions. We are not expecting any further updates for K-1 entries before the end of tax season.

In TurboTax for Desktop, go to Forms Mode and open "K1P Addl Info" under the related K-1 Partner form. Scroll down to Line 13 Code WW to ZZ, line 6. Enter a custom description on the yellow line and the amount in the yellow box. Your entries here will appear on Schedule E page 2.

@utelax34 

[whitedalene]

So if I'm using the online version - are there any options to make this entry populate correctly?

[PatriciaV]

If you understand the instructions provided in the Supplemental Information that came with Schedule K-1 for Box 13 Code ZZ, you can manually enter the information in another area of your tax return. In most cases, you can omit Code ZZ (and amounts) entirely. TurboTax will not use entries you do make for Code ZZ in the Schedule K-1 interview.

If you don't recognize or understand the code sections and other supplemental information for Code ZZ, you may need to consult a tax professional for assistance. It's possible these amounts may not affect your taxable income this year or may simply add/subtract from your partnership basis.

You may also consider upgrading to TurboTax Live. This online service provides step-by-step guidance from a tax expert whenever you need assistance, either over the phone or by screensharing.

@whitedalene 

[meys]

I'm having the same issue.  there's a problem with online turbotax in that it is not asking for the additional information in the K-1 interview for box 13, codes W-ZZ for my non-publicly traded partnerships.  although it does do it properly for my PTPs.      When i enter something for codes AE or ZZ per my K-1s, it doesn't ask for additional info then, but upon review it's looking for additional information, but the only field it will let me put the number in is "other taxes" on the form, which is incorrect and changes my tax amount improperly.   the online version will not let me enter a number on the correct line of the form.   

I tried talking to support at TT yesterday, but lady was very rude and wouldn't listen to what i was telling her the issue was.   she wouldn't acknowledge there was any issue with TT and tried to tell me to enter this a different way, which gives an incorrect tax result.   i'm a CPA and tried to tell her that was incorrect, and she yelled "then why are you calling me?".          

other than just not entering that line at all, anyone using online version figured this out?

[Mustang747]

Also having the same issue.

Is there anyone at TurboTax that can actually solve this issue? We just need the ability to enter the information in the correct space, rather than in "Other Taxes."