Smart Check - Sch K-1 - Box 13 Credits - Fail

[zeta]

Hello there,

I'm done filling my Federal taxes but the smart check keeps failing and brings this up that I must enter Qualified rehabilitation expenditures type. This shouldn't apply to me since my original K1 doesn't have anything in Box 13, it's empty. 

What am I supposed to do?

Transcribing the image:

Check this entry

Sch K-1 Wks-S Corporations -- Sch K-1 S Corporation Additional Info 1: Credits Code E Line 1: Qualified rehabilitation expenditures type must be entered.

[tagteam]

@Mike9241 

[Mike9241]

you must choose the type. there are 3 options. if the k-1 doesn't state which go back to the return preparer.

[zeta]

Thanks for the response.

I was doing a quick comparison with my previous tax years 2018-2020, and it seems like in those years the Schedule K1 Box 13 Credits was empty as well. TurboTax wasn't failing at this part, either.

That's why I'm assuming that in 2021, the application changed a bit for this.

Also, I was looking for this "check this entry" form (named Schedule K-1 S Corporation Additional Information for boxes 8c and 10 through 17) in my 2020 tax forms and schedules that I submitted last year, and I couldn't find it. What I found submitted on 2020 is named Schedule K-1 Shareholder’s Share of Income, Credits, Deductions, etc). I don't think there was anything related to this in previous years.

[zeta]

I took some time to search online and there's not much on this topic, making me believe that TurboTax maybe is buggy on this form or something. Don't take my word for it since I'm no tax expert, but I just left it as no entry, even though the "check entry" complains about it.

Here's what I found:

In 2021 year instructions for Schedule K1 Form 1120S, there's no mention of the dropdown options: Pre-1936, historic under trans rule, historic not under trans rule. It also mentions that Box 13 Code E is related to Qualified rehabilitation expenditures (rental real estate). My S Corp is nothing related to rental real estate at all, which makes sense since Box 2 and Box 3 of this schedule are empty since I don't have any real estate income. https://www.irs.gov/pub/irs-pdf/i1120ssk.pdf

In 2004 year instructions for Schedule K1 Form 1120S, that's where the first mention of Pre-1936, and historic that I can find on Line 13C. https://www.irs.gov/pub/irs-prior/i1120s--2004.pdf. This also applies to Rental Real Estate which doesn't seem to apply to me either.

After reading through that, it seems like it doesn't apply to me even though it fails at the check.

[zeta]

It doesn't let me e-file the taxes when leaving the field empty. Any way to override this to e-file them?

[zeta · Accepted solution]

Scratch everything I've said. It was an end user mistake.

Schedule K1 had Box 17 with code AC.

In Turbo Tax, I selected two codes: A, C; instead of selecting AC from the dropdown menu.