Partnership Share of Profit, Loss, and Capital not Accurately Reflected in Generated Schedule K-1

[larbedtard]

If there is a change in membership throughout the year (e.g. adding a member), TurboTax will ask you to enter the beginning percentage and end percentage of the existing members as well as the new members. For new members, the beginning percentage would reflect their percentage at the end of the last year (i.e. 0%) and the ending balance would reflect whatever percentage they now own.

The TurboTax form allows you to enter the correct beginning and end percentage for the member. However, the resulting K-1 shows the ending percentage in both the "Beginning" and "Ending" columns, rather than the Beginning column showing as "0%". Again, the form inside of TurboTax itself shows the accurate beginning balance percentage but the K-1 Form that TurboTax generates does not. 

[PatriciaV]

You can enter the correct beginning and ending percentages in Forms Mode on Schedule K-1 Worksheet (Sch K-1 Wks). This form has an internal scroll bar on the right to move between partners.

Profit, Loss, and Ownership percentages appear on the top of the right column for each partner. Numbers in green were carried over from last year. Numbers in blue are recent/direct input. 

When you have adjusted all partners, scroll to the bottom of the worksheet to confirm that beginning and ending percentages for all three items total to exactly 100.00000%. TurboTax will show an error (red font / red box) if the totals aren't correct.

Additional Information:

• How do I manually fill out my tax forms in TurboTax Desktop? 
• What's the meaning of all the different colors in Forms Mode?

[genevabriggs]

I am having same issue.  Percentages are correct in the K1 worksheet but show up incorrectly on the K1.  One 50% partner died (50% to 0%) and his trust became the new partner (0% to 50%).  K1 shows 50% for beginning and end for both partners. Cannot get the K1 to correct.  Any solution?

[PatriciaV]

The initial (beginning) percentage for a newly admitted partner would be the percentage immediately after admission whereas the final (ending) percentage for a terminated partner would be the percentage immediately before termination. 

These percentages will be used for reporting in Item J of Schedule K-1. 

Any partner with the Final K-1 box checked should enter the percentage immediately before termination, even if the partner was admitted to the partnership during the same tax year.

@genevabriggs

[genevabriggs]

The percentages for each partner are correct and add up to 100% on the K1 worksheet but print WRONG on the K1s in the tax return.  Any way to correct?

[PatriciaV]

It would be helpful to have a TurboTax ".tax2023" file that is experiencing this issue.

If you would be willing to send us a “diagnostic” file that has your “numbers” but not your personal information, please follow these instructions: 

In TurboTax Desktop, open your return and go to Online in the TurboTax header. (On a Mac computer, choose File >> Share.) 

1. Choose Send Tax File to Agent.
2. You will see a message explaining what the diagnostic copy is.  Click Send on this screen and wait for the Token number to appear. 
3. Reply to this thread with your Token number and tag (@) the Expert requesting the token from you. Please include any States that are part of your return. 

We will then be able to see the same experience you are having. If we are able to determine the cause, we'll reply here and provide you with a resolution. 

@genevabriggs 

[genevabriggs]

Token 1207843    @ PatriciaV

[PatriciaV]

To have the Schedules K-1 match the Sch K-1 Wks, you may override the Beginning and/or Ending Percentages without causing a form error.

1. Go to Forms Mode.
2. Open the Schedule K-1 you need to change.
3. Right-click on the percentage box you wish to revise.
4. Choose "Override."
5. Enter the desired percentage. The number will turn red, but the form will have no errors.
6. Repeat for other K-1s as needed.

To remove the override, right-click the number and chose "Cancel override." The number will revert to the program percentage.

Please note that TurboTax displays the correct percentages according to the IRS Instructions for Form 1065 Schedule K-1 Item J Partner's Profit, Loss, and Capital.

@genevabriggs