TurboTax Bug for K-1 Box 11

[fastlapp]

I have a K-1 Form 1065 for a hedge fund in which I am a LP. I have the following boxes populated on the K-1:

Box 5

Box 6a

Box 11 - Code ZZ

Box 13 - Code H, Code ZZ

Box 20 - Code A, V, and AE

I am domestic partner, and it's not in a retirement account (I did not check the box on TT that "My K1 indicates that the partner is a retirement plan). None of the partnership details listed on the turbotax page apply (not publicly traded, not foreign, etc.). 

Turbotax recognizes the income input into Box 5 and 6 as taxable and increases my tax liability after it is input. However, it does NOT recognize the income in Box 11. The vast majority of the income on the K-1 is Box 11, Code ZZ (per the details of the K-1, this is "SECTION 475(F) INCOME"). It also does not ask for more information about Code ZZ as it does when I input that code into Box 13 - it just skips to next page after I click continue. 

I have also tried inputting the dollar amount for Box 11 as other types of codes (even though this incorrect) just to see if TurboTax will take the income, but it won't. Code K (Gambling Gains), Code A (other portfolio income/loss), etc. So it does not appear to be because of code zz specifically. 

Why does TurboTax not count this as income? Best answer I got from phone support was that is a bug in the TurboTax online software. I've already spent 14 hours doing my taxes on Turbotax and I'll be ballistic if I have to do it all over again in another software. 

[Mike9241]

Box 11ZZ can be for anything. You need to know what it represents, which may be provided in box 20. Then you need to re-enter the amount on a line in the sub-worksheet for 11ZZ that best describes it. If you don't, TurboTax will likely not allow you to e-file because 11zz is not complete. 

There are 2 categories, nonpassive income/loss to be reported on Schedule E page 2

or something else which requires further entry on the appropriate Form or Schedule. 

[fastlapp]

yes, like I said the Box 11 ZZ is for "SECTION 475(F) INCOME" (the full amount). What schedule should that be reported on?

Because I cannot access forms directly when using TurboTax Online, I can't input that information anywhere. I guess that is why the rep said I could not file online. 

[fastlapp]

So after conversation with another turbotax rep who got tech support on the line...2025 users who have a K1 with a Code ZZ in Box 11 cannot file accurately with TurboTax online. This is a new system issue as of 2025 tax year (it worked previously for tax year 2024, in which I had a nearly identical K-1 for the same partnership and used TurboTax online). 

The issue is that after inputting Code ZZ and the amount for Box 11, TT is supposed to go to the next page in which I input the description for Code ZZ. In this case ""SECTION 475(F) INCOME" for the full amount. However, this page never comes up.  I have another Code ZZ in Box 13 and it DOES generate that page for Box 13. But a bug in the software means that I cannot put in any detail for the Box 11 code ZZ. 

Tech support confirmed that I have to now purchase TurboTax desktop and use the "Forms" mode to directly input this information of the tax form itself. Unbelievable - how can a bug this significant be overlooked and get through to production software?!

.

[DaveF1006 · Accepted solution]

The best way to report this income on your return is to do the following.If the K-1 interview is ignoring the entry, you may need to enter it as General Business Income or Other Reportable Income:

1. Navigate to Wages & Income.
2. Scroll down to Less Common Income. 
3. Select Miscellaneous Income, 1099-A, 1099-C.
4. Select Other reportable income.
5. Description: "Section 475(f) Income from [Fund Name] K-1". This will identify this as reported on the K-1 on Box 11 :
6. Enter your Box 11 amount.

[fastlapp]

ok, thank you.