What is 'UBIA' referenced in sec.199A, box 20 of my K-1?

[tagteam · Accepted solution]

Unadjusted Basis Immediately after Acquisition

See https://www.irs.gov/newsroom/tax-cuts-and-jobs-act-provision-11011-section-199a-qualified-business-i...

[DavidS127]

When you are entering your Section 199A Statement or STMT information associated with box 20 code z, you'll do so on the "We need some information about your 199A income or loss" screen.  The last line on that screen "[Name of business] has UBIA of qualified property" is the one you check to "open up the box" to enter the "Unadjusted Basis of Assets" from your Section 199A Statement for box 20 code Z.

Here is a screenshot of that "We need some information about your 199A income or loss" screen:

[Haynesinc]

How do I get back to this screen if I have already gotten to the end of my return and the review process?  I tried going through answering the questions, but this one did not pop up.

[JamesG1]

UBIA refers to Unadjusted Basis Immediately after Acquisition. This figure is routinely used in the calculation for the Qualified Business Income Deduction.  In most cases, UBIA is the original purchase price of the asset.

Return to the K-1 entry.  I assume that this is a partnership K-1.  In TurboTax Online follow these steps:

• Down the left side of the screen, click on Federal.
• Across the top of the screen, click on Wages & Income.
• Under Your income, scroll down to Schedule K-1 and click Edit/Add to the right.
• At the screen Tell us about your Schedule K-1, you tell the software which Schedule K-1 you received.
• Pass through several screens.
• At the screen We need some information about your 199A income, click UBIA of qualified property and enter the dollar amount.  Click Continue.

[ScooterRoo]

What if this information is on a Grantor Tax Information Letter from A liquidating trust.  This letter is due to my parent's trust and all of the documentation from the letter is specific for individual taxpayer entering on 1040 and associated schedules, not a 1041.

[DaveF1006]

ScooterRoo, you will enter this information issued to you from a K1 issued from a 1041 Trust account. This information would be reported in Box 14 in your personal return. Here are your instructions.

1. Click on Federal Taxes > Wages & Income > I'll choose what I work on.
2. In TurboTax CD/Download:  Go to Business Investment and Estate/Trust Income, click on the Start/Update box next to Schedule K-1.   In TurboTax Online:  In the S-corps, Partnerships, and Trusts section click the Start/Update box next to Schedule K-1. 
3. Click Yes on the next screen, Schedules K-1 or Q.  
4. On the Tell Us About Your Schedules K-1 screen.  Click the Start/Update box next to the type of entity that issued the K-1 (S-Corps, Partnerships, Trust/Estate).
5.  Here you will select Trust/Estate 
6. If you haven't started entering K-1 information, continue through the screens, entering the requested information
7. When you followed the instructions given to you above, scroll through the entries and enter your information. You will reach a screen that says Check Boxes that have an amount. Be sure Box 14 is selected, in addition to any other Box that may have  information about the K1.
8. Eventually you should arrive at a screen that says enter Box 14 information. Here you will select I-Section 199 information. Leave the amount blank. Here is where you will start to enter information that is on your grantor letter.
9. Press continue at the bottom.
10. You will pass trough two screens but eventually arrive at a screen that says We see you have Section 199A income. Here is where you start entering information that is on your grantor letter. The information you enter will automatically generate a 8995 and allow you to claim a Qualified Business Deduction on your return

[DorothyJ]

Thank you so much for this information!  I need to enter Grantor Letter info from HGR Liquidating Trust (actually 2 letters, one for my account and another for a joint account).  I followed your instructions and got to the screen for entering the 199A info.

According to the Letter, I also need to enter 2  other categories:  1) Capital Gains Information including "Business Property Gain or Loss" & "Unrecaptured Section 1250 Gain" (these 2 fields show the same dollar amounts in each of the Letters) and 2) Miscellaneous Income Information ("Partnership Income from Passive Activities").

Is there another box or boxes I need to check in the K1 section in order to enter these amounts?

[tagteam]

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@DorothyJ wrote:

Is there another box or boxes I need to check in the K1 section in order to enter these amounts?

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The other two categories (on the K-1 entry) would be Line 9c (unrecaptured Section 1250 gain) and Line 10 (Net section 1231 gain (loss)).

[DorothyJ]

I followed the directions given by DaveF1006 & entered all the numbers from the Grantor Letter by generating a K1 as Dave describes.  I checked boxes 1-5 and box 14 on his Step 7.  This gave me places to enter all the numbers.  

Problem: on the Schedule E generated from my K1 entries, the "Partnership Income from Passive Activities" is entered under the "Active" column instead.  (note: the active & passive numbers flow down to the same spot.)  Schedule E also shows this income as belonging to the Liquidating Trust as opposed to the REIT Properties LP as indicated on the Grantor Letter.

Bottom line: I did this for both of the Grantor Letters I received from HGR Liquidating Trust and it made zero difference to what I owed.

[tagteam]

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@DorothyJ wrote:

Problem: on the Schedule E generated from my K1 entries, the "Partnership Income from Passive Activities" is entered under the "Active" column instead.  (note: the active & passive numbers flow down to the same spot.)  Schedule E also shows this income as belonging to the Liquidating Trust as opposed to the REIT Properties LP as indicated on the Grantor Letter.

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That is most likely because you entered the GIS as a K-1 from a trust rather a K-1 from a partnership. 

For your purposes, the entity does not matter in the least; you need to enter the figures on the proper lines (boxes) in TurboTax so they flow to the correct forms. 

For example, had you entered the K-1 as if it had been issued by a partnership (1065), you would have been able to select that you were a limited partner and that you did not materially participate. As a result, Schedule E would appear as "passive" and the name of the LP would be displayed.

[DorothyJ]

Thank you, tagteam!

[Jacker]

Thanks but I just don't see it. When I go to the K-1 for Partnerships, I don't even see a selection for Box 1-5 much less being able to determine what goes where if I got there. I did get to the Box 14 part for the UBIA but the others not so much. So you got it to populate a form 4797? 

[tagteam]

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@Jacker wrote:

.....I did get to the Box 14 part for the UBIA but the others not so much.....

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If you got to the part for the UBIA and it was Box 14, you were not in the K-1 for Partnerships section; you were in the K-1 for trusts/estates section.

The UBIA for partnerships would be Line 20 with a Z code for a K-1 (1065).

[poco12]

I have a K-1 and on line7 net rental estate income it has $8,124 on the atached qualified business incomepass-through statement A it shows rental income of $7,936 and UBIA of qualified property $2,717.. When compleeing the turbo tax work sheets where do I enter these figures?