Bug: incorrect handling for box Schedule K-1 box 11 code S

[musiclover]

On Turbotax Desktop Premier 2025, box 11 code S entries for my K-1 are going to Schedule D, line 3 instead of line 5. This is incorrect per IRS instructions:

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"Code S. Non-portfolio capital gain (loss).

The partnership will provide information on net short-term capital gain (loss) and net long-term capital gain (loss) from Schedule D (Form 1065) that aren’t portfolio income. An example is gain or loss from the disposition of nondepreciable personal property used in a trade or business activity of the partnership. Report total net short-term gain (loss) on Schedule D (Form 1040), line 5. Report the total net long-term gain (loss) on Schedule D (Form 1040), line 12."

https://www.irs.gov/instructions/i1065sk1#en_US_2025_publink[phone number removed]

This is clearly a bug, and one that has been reported before too. Example: https://ttlc.intuit.com/community/taxes/discussion/entries-in-k-1-not-transferring-over/00/3622835].

Why hasn't it been fixed yet?!

[MelindaS1]

You're right, the programming is out-of-date and I'll be submitting it today. For now, to get your Schedule D matching the K-1 and 1099 copies the IRS have so you can file your taxes, just change your entry in the K-1 step-by-step interview or Forms view worksheet from Box 11 code S to Box 8 for Short-Term Capital Gain (or Box 9 for LTCG). I tested this and it flowed correctly. 

You should also delete the K1P Addl Info worksheet if you had already entered the short-term or long-term info for the Box 11 Code S previously (see below); select Delete Form at the bottom of this page to remove the unnecessary data (sometimes the program glitches when prior entries are removed and left blank). 

This workaround didn't seem to affect Form 8582, but take note of your passive/non-passive activity loss tracking if you're impacted by the loss limitation rules: learn more. 

[musiclover]

@MelindaS1 

Wouldn’t that be incorrect though? My K-1 clearly mentions this amount in box 11 code S. How can I just shift it to box 11 code 8?

[MelindaS1]

I understand this concern, but don't worry, it's a perfectly correct thing to do given the program bug. 

You were right about the instructions for Schedule D, and that's the important thing here: that the forms the government sees look the way they expect/want them to, and also reports your income accurately according to the rules. They publish detailed instructions for the forms, because that's what they receive and read, not the inputs. Accountants often use software workarounds to get the tax forms printing the information accurately. 

• When you print out the PDF of your tax return, you can print 2 copies and compare, to verify that what you're sending to the taxing authorities is accurate information: 

1) All official forms required for filing - the government copy

2) Tax return and all calculation worksheets (see below) - this is your preparer copy

The other key thing is that they already have your Schedule K-1 and any 1099's you received, so you don't want mismatch data to raise any eyebrows. 

• If you're still uncomfortable changing the input, then the alternative is to file for an extension, make your extension payment by tomorrow if needed, and wait until the issue is de-bugged to file.
   
• A last alternative is to switch to Forms mode, try to right-click and Override the 8949 and Sch D with typed numbers input directly, and then paper file. This isn't the most ideal option.

[Apbbear]

Lots of issues for Turbox Tax in entering info on Form K-1.  Since not a lot of users are investing in partnership companies and the accounting from the partnership and how each brokerage firm handles the data are different, it's probably difficult for Turbo Tax to formulate any good way in their software.  However, this should not be any excuse and I think the community should really alert Turbo Tax on issues/bugs like this.