Review found a problem with K-1 Wks Box 20 Code Z for Enterprise Products Partners L.P.

[Mes01]

I have the desktop version of Premier for tax year 2020

The Review found an area where we'll need to review my entries.

Sch K-1 Wks Partnerships (Enterprise Products Partners L.P.): Box 20 Code Z has been selected but no Section 199A has been entered on Statement A.

At the Enter Box 20 display, I entered -231 for code Z - Section 199A information,

At the Describe the Partner display, I selected All of my investments in this activity is at risk,

At the We see you have Section 199A income display, I selected The income comes from the partnership that generated this K-1,

At the We need information about your 199A income display, I did not select any of the boxes,

At the Let's check for some uncommon adjustments display, I selected None of these apply.

Please help me to clear the error?  Thanks.

[Mike9241]

EPP as you know is a publically traded partnership PTP).   what you didn't know is that entering an amount in 20Z does nothing in Turbo tax. you can omit it completely or leave it. as a PTP the business loss will not be allowed (will not flow to schedule E page 2.  you also need to enter the QBI info (line 20Z) in section D1 of the k-1. in section D1 if you properly check box D in part I  the PTP box in D1 should be checked. if not go back and check it. leave the box for the name and ein blank for now. you should see a line that says "shareholder's share ....). what you own is stock in EPP that is taxed as a partnership. anyway, right below that is a line that says ordinary business income or loss. this is the line to enter the QBI amount (20Z). the name and ein will populate. since it is a loss the QBI will not be included in the current year QBI calculations on form 8995

you may also have to check a box as to whether it is a SSTB or not. it is not.   

[Mes01]

Hi Mike9241,

Thanks for the quick reply.  I removed the Box 20 Z code and the amount.  I also responded NO to the request Does your K-1 has a code Z box 20.  This did clear the error.  Is that all I needed to do?  Will this cause an issue with the IRS?

I did not have a section D1 or QBI info on EEP's K-1.  There was no D box to check in turbotax nor a D1 section.   Am I missing something here?

[nexchap · Accepted solution]

@Mes01 You want to keep the 20Z info in TT.  That's what triggers the interview to ask about it, and to complete the QBI sections.

Your problem was in not checking anything on the "We need some information about your 199A income" screen.  That's where you actually provide more info about the 199A income which flows to the QBI section. 

So the first box, regarding "EPD has business income (loss)" definitely applies and you'd fill that out.  They may have also reported 1231 gain (loss), so you'd do that one too. 

[Mes01]

Thanks nexchap,

That worked perfectly and removed the Review Error.

However, nothing was displayed regarding a QBI section.

[nexchap]

@Mes01 Since MLPs rarely report income until you sell, the QBI deduction won't come into play until then.  But until then, 199A income/loss is a lot like the passive losses that also show up each year:  both need to be suspended for use in future years.  TT will track that, provided it all gets entered in (which it sounds like you've taken care of). 

Note that if you want to verify what TT is tracking (highly recommended!), head into forms and open up the K-1 Partner worksheet.  Towards the bottom you'll find sections D1 and D2 which will show what QBI info is being carried forward or allowed.

[timoooshy]

Does the information regarding "EPD has business income (loss)" come from PART III section 1? (and the rest or income come from PART III?)

I do see 1231 gain(loss) which is from PART III section 10 as well.

Thanks!

[nexchap]

@timoooshy Correct.

[1912]

I have a 2021 tax question for K-1 from EPD Limited Partnership: TT won't let me file as my K-1 has box 16 checked saying a K-3 is attached. There is none. Can I just uncheck the box without setting off alarms in the IRS offices for changing a form? Any help would be great. 

Oh, one thing more. We have variable income that doesn't show up until Jan following year. However, I am always careful to have withheld as much in taxes as we owed the previous year. Yet TT assessed us a tax penalty for under payment of withholding. How can I correct this penalty?

[nexchap]

@1912 You can uncheck the box referring to the K-3.  When it eventually comes out, you'll want to see if it affects your return.  It probably won't, but if it does you can amend at that point.  As to tax penalty, Form 2210 is where the IRS does calculations on underpayment penalties.  You'll want to look that over to see why you're being charged.

[1912]

K-1s used to be so easy (LOL) Thank you.

[PrestigeVision]

Okay I figured it out. The problem is that TurboTax Home and Business does not have a section to enter the Rental Income Loss. So. Run the Smart Check and it will take you to the error. Click inside the form that shows up and scroll down until you reach the form Statement A (199A). Now you can see the line Rental Income Loss. Input this value (should be -) into the box. Once you have done this, the error disappears and you can now submit your finished taxes online. You’re welcome. 

[mikedduhon]

YESSSSSSSSSSS

You da man