Hello TT team,
For the subject details, I need your help to understand what calculation do I need to do to fill out Form 1065.
I have two separate K-1 forms. The first is for business Income (box 1), and the second is for Rental Income (box 2). Both incomes are negative numbers (loss). For both K-1 forms, Code Z STMT is entered in box 20.
For the first K-1, Section 199A information includes only 3-entries, i.e. Ordinary Income (loss), W-2 Wages, and Unadjusted Basis of Assets.
For the second K-1, Section 199A information includes rental income information for 5 different locations. Each dollar value is different, but for example, I am entering it in a random format below:
Rent - Location A: Rental Income (Loss) $100, Unadjusted Basis of Assets $1000
Rent - Location B: Rental Income (Loss) $200, Unadjusted Basis of Assets $2000
Rent - Location C: Rental Income (Loss) $300, Unadjusted Basis of Assets $3000
Rent - Location D: Rental Income (Loss) $400, Unadjusted Basis of Assets $4000
Rent - Location E: Rental Income (Loss) $500, Unadjusted Basis of Assets $5000
Rent - Unallocated Expenses: Rental Income (loss) $-2500
This is my first time becoming a business (Limited, Domestic, Individual) partner or first-time K-1 filer. Following are the questions:
1. For the second rental K-1 income, do I need to enter all five individual entries, or do I need to sum up all values for each option: Rental Income (loss) and UGA values?
2. Where do I need to enter Unallocated Expenses Rental Income (loss)?
3. How do I calculate Qualitifed Bussiness Income (QBI) deduction, or is there an interview process that I will have to follow to calculate QBI?
4. There are two sections in K-1. A) IRC SEC. 163(J) Adjusted Taxable Income Calculation, and B) IRC SEC. 163(J) Business Interest Expense Limitation. Do I need to enter these entries anywhere?
I am using TT Delux Desktop version which has interview questions for Schedule K-1 (Form 1065).
Let me know if you have any questions. I will greatly appreciate your response.
I will really appreciate it if you can answer anyone question or all questions. Thanks!
I'll answer your questions as you have asked them:
For more information on how to enter your K-1, please see Where do I enter a K-1 that I received?
Yes to question a and for b, it may not affect your current year return, but it will affect your QBI Carryforward to be used in future years!
I'll answer your questions as you have asked them:
For more information on how to enter your K-1, please see Where do I enter a K-1 that I received?
Hi AliciaP1,
Thank you for answering my questions in a sequential manner.
I have only one follow-up question related to #2. When entering the Unallocated Expenses (-2500) as "XXX has other deductions", the software is asking me a question that this is an uncommon adjustment, so Value(s) on Statement A need to be changed, which now reads as - Other deductions related to QBI = +2500.
a. Shall I choose this autocorrected option and move
on?
b. Since all my losses are negative, including the unallocated expenses is negative, does this affect my return in any way? I was thinking there shouldn't be any effect as I am reporting only losses and no gains.
Please answer at your earliest convenience. Thanks
Yes to question a and for b, it may not affect your current year return, but it will affect your QBI Carryforward to be used in future years!