Schedule K-1 Shows Values in Box 1 and 2

[msc0902]

In my schedule K-1, boxes 1 and 2 have values. TurboTax tells me to enter amounts for each business activity separately. Does this mean that I have to enter amounts such as "Capital Account Information" and amounts related to the box 20 twice?

[AnnetteB6 · Accepted solution]

No.  You would enter a complete K-1 including the Capital Account Information and the box 20 information, plus the box 1 income.  Then, for the second K-1 to report the box 2 income, you would only need to enter the basic K-1 identifying information (name, EIN number, etc.).  You would not need to repeat the Capital Account info and you should not repeat the box 20 information.

@msc0902

[james90day]

If TurboTax is fully aware of this, then why doesn't the software do it for you?  This seems like a really complicated work around that then becomes a BIG ISSUE when trying to enter my state tax information.  SIMPLY enter all of the K-1 information one time and let TURBOTAX handle the data and put it in the correct locations.  Otherwise, this is really tormenting.  

[Kozyt]

Why won't turbotax let me fill in the form manually?  I never had a problem with the IRS when I did it manually!

[nexchap]

@Kozyt Which form?  You are essentially filling it out manually, since you have to split the values on lines 4a through 20 between the two K-1s. 

[jgilmer78]

The answer still not answer what I do with all of the information in the other boxes.  I have not idea what information relates to box 1 versus box 2 income. TurboTax needs to get this issue fixed so that all information from a K-1 can be entered in one form

[nexchap]

@jgilmer78 Imagine you were deducting a home office, and needed to split your electric bill between personal and business usage.  Would you expect TT to make that split for you?  The software has no idea whether your office uses 1%, or 99%, of your total electric bill.  Similarly, why do you expect TT to know how much of your 13A charitable deductions were from the rental side of your partnership, or the pipeline side?  Either the K-1 preparer must give you this information or you have to use your best judgement to make the split. 

As a rule of thumb, if one side of the business is massively larger than the other, its probably safe to assign all the line items to the "big" K-1.  If they're close to the same size, a proportional split would seem logical.  And if the decision on how to split things is going to make a material difference to your tax bill, then its probably best to hire a tax preparer to help make the decisions.