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Level 2
March 30, 2026
Question

K1 box 20 code b

  • March 30, 2026
  • 2 replies
  • 1 view

My understanding is these investment management fees are not deductible however the amount listed flows to Schedule A. These are not investment interest expenses

    2 replies

    Mike9241
    Level 15
    Level 15
    March 30, 2026

    Box 20. Other Information
    Code A. Investment income. Report this amount on
    Form 4952, Part II, line 4a.
    Code B. Investment expenses. Report this amount on
    Form 4952, Part II, line 5.

    in desktop deluxe line 20B was ignored, nothing happened. The amount did not flow to schedule A or ebven the line on the 4952

     

    My understanding is that 20B, just like 20A, are not used by TurboTax. Those income and expenses are listed on other line(s) of the K-1, probably line 13 for 20B

     

    Thus there may be a bug. However, there was an update today so perhaps the issue is fixed. 

     

    the line 5 instructions for Form 4952 

    Line 5
    Investment expenses are your allowed (expenses that were subject to the 2% haircut are not allowed expenses such as management fees) deductions, other than
    interest expense, directly connected with the production of
    investment income. For example, depreciation or depletion
    allowed on assets that produce investment income is an
    investment expense.
    Include investment expenses incurred directly by you or
    reported to you on Schedule K-1 from a partnership, or by an S
    corporation, but only if you are allowed a deduction on your
    return for the expense.
    Investment expenses don’t include any deductions used in
    determining your income or loss from a passive activity.

     

     

     

    Mike9241
    cqodAuthor
    Level 2
    March 30, 2026

    Thanks for that clarification. It appears box 20 code b does not flow through however box 13 code L (same amount as box 20 code b)does flow to schedule A misc deductions worksheet line 28 which flows to schedule A line 16 still improperly taking the deduction. 

    PatriciaV
    Level 15
    April 2, 2026

    If there are expenses included in Box 13 Code L that you cannot deduct on Schedule A, your best option is to reduce the amount entered for Code L (to zero if appropriate).

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