Solved: Trying to enter a loss from a K-1 (<$1000) and Turbo Tax enters it as $0. The K-1 has box 2 filled in with the loss, and box 20 with codes Z and AB; that's it. Any ideas?
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Trying to enter a loss from a K-1 (&lt;$1000) and Turbo Tax enters it as $0. The K-1 has box 2 filled in with the loss, and box 20 with codes Z and AB; that's it. Any ideas?

My partners have their taxes done by professionals and claim a Schedule E gets created as well as the K-1, and the loss gets deducted from their income. Does anyone know if there are limitations on losses from a K-1?


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Level 12

Trying to enter a loss from a K-1 (&lt;$1000) and Turbo Tax enters it as $0. The K-1 has box 2 filled in with the loss, and box 20 with codes Z and AB; that's it. Any ideas?

There can be limitations, but TurboTax should not change the amount the 0.  Make sure you are using a negative sign in front of the amount.  There are follow-up questions that you have to answer before and after you enter it which will determine the allowable amounts.  And I am assuming you have other income reported to offset.  

There are several reasons why you may not be allowed the entire loss shown. on your LLC Partnership K-1.  You may have indicated:

  • that you are a Limited Partner, rather than a General Partner.
  • that you do not materially participate in the partnership
  • that all of your investment is not at risk.
  • that your loss is greater than your basis in the partnership.

If your LLC is reporting a loss from Rental Real Estate, and your Modified Adjusted Gross Income is between 100,000 and 150,000, your loss may be phased out.  Even if your loss is completely phased out, the K-1 should still show the loss in TurboTax.  

"There are potential limitations on partnership losses that you can deduct on your return.  These limitations and the order in which you must apply them are as follows: the basis rules, the at-risk limitations, and the passive activity limitations."

http://www.irs.gov/pub/irs-pdf/i1065sk1.pdf 

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Level 12

Trying to enter a loss from a K-1 (&lt;$1000) and Turbo Tax enters it as $0. The K-1 has box 2 filled in with the loss, and box 20 with codes Z and AB; that's it. Any ideas?

There can be limitations, but TurboTax should not change the amount the 0.  Make sure you are using a negative sign in front of the amount.  There are follow-up questions that you have to answer before and after you enter it which will determine the allowable amounts.  And I am assuming you have other income reported to offset.  

There are several reasons why you may not be allowed the entire loss shown. on your LLC Partnership K-1.  You may have indicated:

  • that you are a Limited Partner, rather than a General Partner.
  • that you do not materially participate in the partnership
  • that all of your investment is not at risk.
  • that your loss is greater than your basis in the partnership.

If your LLC is reporting a loss from Rental Real Estate, and your Modified Adjusted Gross Income is between 100,000 and 150,000, your loss may be phased out.  Even if your loss is completely phased out, the K-1 should still show the loss in TurboTax.  

"There are potential limitations on partnership losses that you can deduct on your return.  These limitations and the order in which you must apply them are as follows: the basis rules, the at-risk limitations, and the passive activity limitations."

http://www.irs.gov/pub/irs-pdf/i1065sk1.pdf 

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