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TurboTax keeps asking for fixing errors and doesn't allow electronic submission because my schedule K-1 has code M but no code F for line 16

My schedule K-1 has code A, B, C, M, and AA for line 16. A is OC, B and C are the same, M is a deduction on legal fees, and AA explains NON-ECI for current year.

 

I am US resident so this should be considered as US source income. There is just no code F for line 16 so I am not sure why TurboTax keeps asking for fixing errors on code F and also doesn't allow electronic submission?

 

btw, according to instructions for Form 1065, codes M and F for line 16 are 

 

Line 16m. Passive category (code M).

 Enter the amount of deductions allocated and apportioned at the partnership level to passive category foreign source income (defined in the instructions for line 16f).

 

Line 16f. Passive category (code F).

Passive category foreign source income. This category includes the following income.

  • Passive income.

  • Dividends from a domestic international sales corporation (DISC) or a former DISC.

  • Distributions from a former foreign sales corporation.

 

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Accepted Solutions

TurboTax keeps asking for fixing errors and doesn't allow electronic submission because my schedule K-1 has code M but no code F for line 16

There has to be income in code F to utilize a deduction in code M. There are 2 options to remove the error. You can revisit the interview, skip thru to box 16 entries and insert $1.00 in code F.

 

The 2nd option is to dispense with foreign transactions as there is no benefit because there is no foreign tax paid in code P.

 

If you choose the 2nd option, then bring up the “schedule K-1 partnership additional information” form. Scroll down to “Box 16 foreign transactions”, then down to “Codes P, Q” etc. and look for line 3a which states “do you elect to forego completion of f1116 foreign tax credit?”. Checkmark Yes. TT will then ignore any box 16 entries and the error will be cleared.

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2 Replies

TurboTax keeps asking for fixing errors and doesn't allow electronic submission because my schedule K-1 has code M but no code F for line 16

There has to be income in code F to utilize a deduction in code M. There are 2 options to remove the error. You can revisit the interview, skip thru to box 16 entries and insert $1.00 in code F.

 

The 2nd option is to dispense with foreign transactions as there is no benefit because there is no foreign tax paid in code P.

 

If you choose the 2nd option, then bring up the “schedule K-1 partnership additional information” form. Scroll down to “Box 16 foreign transactions”, then down to “Codes P, Q” etc. and look for line 3a which states “do you elect to forego completion of f1116 foreign tax credit?”. Checkmark Yes. TT will then ignore any box 16 entries and the error will be cleared.

TurboTax keeps asking for fixing errors and doesn't allow electronic submission because my schedule K-1 has code M but no code F for line 16

Thanks. I simply added 0 to code F and was then allowed to file the forms!

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