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E
Level 2

schedule k-1 Box 16 entry issue

My Schedule K-1, Box 16 has codes A, B, C, E, F, G, I, J, L, M, N, P, and Q. I got error message (and can't resolve it) when TurboTax perform "Smart Check". It says... "Box 16 Description has been entered for more than one type of income. Use separate K-1 worksheets to report more than one type of foreign gross income sourced at the entry level" . 

 

I have no idea what to do here. Does it means that I have to enter a separate K-1 for each code (total 12 worksheet)? Experts Please help! I am so tired of trying to resolve it now. Thanks in advance!

2 Replies
Mike9241
Level 15

schedule k-1 Box 16 entry issue

you need 3 k-1 to enter the info

you see you have 3 categories of foreign income - foreign branch, passive and general and each must be entered on its own form 1116. whether its worth the effort I leave to you 

code A - each K-1

code B  - each k-1

code C - doesn't get entered if you are a US resident otherwise enter on each k-1

codes I and J need to be allocated based on codes E, F, and G and entered on their respective k-1's

codes P & Q should be allocated by category as specified on the K-1 and entered accordingly on your k-1's

category - foreign branch - codes E and L go on one 1 k-1 along with the apportioned amounts for I and J and the FTC for this category from P and Q

category - passive - codes F and M go on the second k-1 along with the apportioned amounts for I and J and the FTC for this category from P and Q

category - general - codes G and D go on the 3rd K-1 along with the apportioned amounts for I and J and the FTC for this category from P and Q

 

technically you must choose between foreign taxes paid code P and those accrued code Q. you are not supposed to take both types in the same year.

 

if there is only one category of Foreign Taxes (ie P or Q)  then you only need 1 k-1 and enter the items only for that category

 

if your total of foreign taxes is $300 or less if single, head of household, or married filing separate or $600 or less if filing joint form 1116 is not required.

 

 

 

 

 

 

E
Level 2

schedule k-1 Box 16 entry issue

@Mike9241, thank you for your help. 

 

I wish the tax code can be simplified to make my life a bit easier when doing tax return every year. I wish the issuer of Schedule K-1 can provide and include more "real world how-to" explanation when they mail out their Schedule K-1 package.

 

I also wish TurboTax's software is able to intelligently decode the complexity of Box 16 for its user.

 

Thanks again, Mike9241.

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