Problem with Trust K1 that includes Section 199A Dividends from REIT ETFs

[ReinaK]

I'm having similar issues with Turbotax Deluxe.

I have section 199A dividends from various ETFs reported in my K-1. After entering the section 199A dividends for Box 14, it asks me to "Enter the category of income shown on box 14." I'm not sure if this is specifically tied to the 199A dividends or not, but regardless, I select "Passive Category." After a couple more questions unrelated to the 199A dividends, it asks me the following:

Name and employer ID number for the business

You reported Section 199A income in box 14 of this K-1. Section 199A income reported on a form 1041 Schedule K-1 generally comes from a business within the trust or estate that has it's (sic) own name and EIN separate from the name and EIN of the trust or estate. Enter the name and employer ID number ... for the business that generated this income.

As others have already mentioned, this is an inappropriate question because the income did not come from a business within the trust, and there seems to be no way to avoid this question without entering false information to satisfy the form requirements.

If I enter the trust name and EIN (again, this is false information), the next step allows me to enter the portion of the 199A amount that came from REITs. However, this amount is never added to Form 8995 (line 6) / 8995A (line 28). There is an amount on that line, but it's from other 1099-DIV Section 199A income.

In the Qualified Business Income Deduction Summary step, it even lists the trust with $0 QBI deduction, alongside the 20% REIT income deduction from the other 1099-DIVs. But this process is probably not worth pursuing anyway, since we should not be entering the trust name and EIN as a QBI "trade or business" in the first place.

Regarding the idea of adding an additional DIV statement, that sounds risky. I believe the IRS matches your reported 1099-DIVs with their records, and if you try to submit a 1099-DIV they don't have on file, I feel it's certain to raise flags.

[renogeno]

@ReinaK, Yep, you've summed up exactly what everyone else has stated and the answer is.........they're aware and working on it.........stand by.

[MaxG]

ReinaK, really excellent, thorough description of the issue.  Let us hope the folks at TT read your narrative and fix the issue, soon, as this has been going on way too long.  I, personally, have heard nothing from the TT CPA who emailed me that he would contact me when a fix was found.

[MSRatliff1]

How do we get on the email list for notification that the problem has been solved?  I have the same problem as everyone else, and am waiting impatiently to file.  

[MaxG]

Assuming that I am notified as was promised....I will post the email to let everyone know the resolution.

[TMS17]

Thanks for posts.  I can’t believe it’s not fixed yet.

[eneranch]

****Looks like they fixed the problem ****

I opened my TurboTax Deluxe CD Windows 7 this morning and it had an update, after the update I still found the errors with the Section 199A REIT Dividends, decided to delete all the things TT had me do in an attempt to "fix" or "force" the Software into doing what it should have done in the first place (removed the fictitious name of the Business Entity (Section D1) & removed the "override" in  QBI Deduction Summary that forced the Software to populate Form 8995 Line 6) after doing that I saved the File , exited then restarted the  Program; still didn't work right.

At this point I deleted the K-1 altogether, saved & exited again. restarted the Program and input a new K-1 and it worked, no more prompt for a Name & EIN for a Business, the QBI Deduction Summary was correct & Form 8995 Line 6 was correctly populated.

I will attempt to Efile in the morning & will update here with the results.

[Anonymous_]

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@eneranch wrote:

****Looks like they fixed the problem ****

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It worked for me (on my test return) and I did not have to delete the (test) K-1.

[ColetteBurrus]

Same for me (worked without deleting the K-1), but then I hadn't done any fiddling with the data. I will delete & re-enter the K-1 before efiling, just to make sure everything's cleaned up, and I'm disappointed that no one from TurboTax support contacted me to let me know that a fix was available.

[MaxG]

No one has contacted me either.  I find that highly disappointing unless I hear from them today.  Possibly my point of phone contact will email me today.

[eneranch]

I was never notified either, about par for the course for this whole situation. 

I got my notifications that both Federal and State E-files have been accepted.

[renogeno]

Yep! Worked for me, also. Didn't need to delete/re-enter K1, just went through that section again and the 8995 is now showing the REIT dividends. The pisser about this whole mess??? Made not 1 cent difference in my taxes!!

[needtoknowbasis]

I can confirm as well. The latest update of TT Deluxe Windows (download) fixed the problem for me. It now asks whether it's business or REIT income. I didn't need to delete the K-1, just "update" it and run through the questions again.

[DavidS127]

TurboTax updates after 3/10/2020 should have resolved the "provide name and employer ID for K-1 Section 199A dividends" issue.  If you still have an issue, please advise.

@ReinaK

[MaxG]

I also had the update work for me without deleting the input K-1's.  Everything was populated to 8995-A but I did step thru each K-1 and ensure that the REIT Dividend was not tagged as business income.  Efiled and accepted.  Still disappointed I have not been contacted by TT as promised February 29 (13 days ago):

Thank you for chatting with me. I did not forget about you.
Your problem/issue is still under investigation so that correct code can be entered and that the investigation has been updated with your case number and your inquiry. My apologies for the delay and thank you for your patience. I will let you know as soon as the problem is solved. Thanks,  Rxxxxxx  Rxxxxx CPA