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Tax_Lego
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Using Turbotax to input K1 information into 1040

I have a question regarding Turbotax Online and how the Schedule K1 (Form 1065) is represented on the 1040. The K1 is prepared on the basis of a partner who materially participates in the conduct of the business. Specifically there are amounts in 13H and 13ZZ with the following footnotes.

 

LINE 13H - the footnotes shows 3 different amounts that comprise the 13H with the following comments

  • Investment Interest Expense from trading - for individuals this amount should be reported on form 1040, SCHEDULE A, LINE 9

  • Investment Interest Expense from trading - material participant activities: This amount should be reported on the Form 1040, SCHEDULE E, PART II, COL (i).

  • Deductible business expense: This amount should be reported on the Form 1040, SCHEDULE E, PART II, COL (i).

 

LINE 13ZZ

  • For Individuals, the amount is reported as "OTHER TRADE OR BUSINESS EXPENSE" should be reported on the Form 1040, SCHEDULE E, PART II, COL (i).

 

However, when I go through the turbotax questions in K1, these get reported on Form 4952 and Schedule A of the 1040 in the investment interest expense deduction.

 

 

How do I make turbotax put these on Schedule E - the online version doesn't allow directly inputting values into Schedule E either. It almost seems like these should not be all under 13H when entering into Turbotax.

 

Is there a way to input 13H and 13ZZ in turbotax so this goes to schedule E?

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1 Reply

Using Turbotax to input K1 information into 1040

13H is investment interest expenses which defaults to form 4952, where  the allowable portion is calculated

1065 k-1 13H instructions

Code H. Investment interest expense. Include this amount on Form 4952, line 1. If the partnership has investment income or other investment expense, it'll report your share of these items in box 20 using codes A and B. Include investment income and expenses from other sources to figure how much of your total investment interest is deductible. You'll also need this information to figure your investment interest expense deduction.
If the partnership paid or accrued interest on debts properly allocable to investment property, the amount of interest you're allowed to deduct may be limited.
For more information on the special provisions that apply to investment interest expense, see Form 4952 and Pub. 550, Investment Income and Expenses

 

13ZZ can be entered as a total assuming it's both trading investment interest and other deductions both reported on schedule E.  13 ZZ requires a sub- worksheet where you enter the detail. evidently there's a bug because no sub-worksheet opens for 13ZZ. contact support. 

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