TurboTax should calculate this number for you. Generally, you can enter the number that appears on Form 1065 Line 1a Gross receipts or sales.

For more info see: IRS Instructions for Form 1065 (2021).

[Edited 3/3/2020 | 6:50 AM PST]

So since this is only "Gross receipts or sales" and my company did not sell anything during 2021 (as we're currently in development mode only), then I can leave this as 0 (which is what TurboTax did input in line 1a as well)? And also remove "AG" from line 20E?

Thank you!

Section 448 refers to qualifying to use the cash method of accounting, which can be limited based on your gross receipts. You can leave the AG abbreviation there, and just enter -0- for the gross receipts.

Ok I’ll do that. Thank you both. 

Question - I'm using TurboTax Business for my partnership and it's not populating the amount for Box 20 AG. I also can't edit the amount on the supplemental worksheet. Am I missing something? We definitely had gross receipts and the total from the last 3 years is less than 25m so I want to be sure I'm reporting if I should be.

Reporting Gross Receipts for Section 448 on Form 1065 Box 20 Code AG is optional for partnerships with current year gross receipts less than or equal to $5 million (per IRS Instructions for Form 1065 (2021)).

@kyla5

Thank you so much! Everything I googled about K-1s referenced "less than 25m" - I don't know how I missed the instructions for the 1065. 

Thank you for the update! We are glad you were able to get your issue resolved. 

@kyla5

I'm having the same issue. Turbotax is not calculating/prefilling this number and then throwing it up as an error, is this an issue with the software?

Help!  Same issue.  But last year TTax filled out line 20 on my K1 as $108k even though line 1a on 1065 was $190k.  I never have returns or allowances.  How would the number be anything other than line 1 on the 1065?  This year it's my only "error" and it asks me to manually enter AG  GROSS RECEIPTS FOR SECTION 448(C) .   Help please.   

@PatriciaV 

@ThomasM125 

@andyt2  Did you end up finding a solution?  I have the same problem.

See @PatriciaV ’s response up above. That’s what I followed. 

You're fine with it being an unexplainable formula (I discovered later that it's  income minus returns and allowances) yet..... it's "optional" to report it?  Otherwise, "0"?  This is the answer?!!!! A big enough error that it prohibits submission, yet it's not  actually an error at all?  This makes no sense.  It was not this way last year.  The number was calculated by TT to be about 15% LESS than the gross total yet I've NEVER had any customer returns.

It’s not an error in my case I guess. The number I had in 1a made sense. 

TurboTax for business 2021 does NOT support this entry and states to fill in the appropriate tax form. So the question remains, what is the form and how do you enter it?   This is not the 1065 line 1a entry. It is a 3 year history of gross receipts. 

there is no form to submit with your return. omit entering this.   what this is all about is whether certain entities (partnerships with C-corp partners. C corporations, and tax shelters)  must use the accrual basis of accounting.   this would only apply to those certain entities if gross receipts were over $25,000,000 for 3 consecutive years.

if you have further interest read the code section

https://www.law.cornell.edu/uscode/text/26/448 

Thank you for this answer. 

Here's the relevant paragraph from the IRS publication which clarifies what to do with a Box 20 Code AG "Gross receipts for section 448 (c)".

Instructions for Form 1065 (2023)
U.S. Return of Partnership Income

https://www.irs.gov/instructions/i1065#en_US_2021_publink100016024

"Gross receipts for section 448(c) (code AG). Regulations section 1.163(j)-2(d)(2)(iii) requires that partners in a partnership include a share of partnership gross receipts in proportion to their share of gross income under section 703 (unless the partnership is treated as one person under the aggregation rules of section 448(c)). Partnerships with current year gross receipts (defined in Regulations section 1.448-1T(f)(2)(iv)) greater than $5 million are required to report to partners their distributive shares of their current year gross receipts, as well as their distributive shares of gross receipts for the 3 immediately preceding tax years. If a partnership and a partner are treated as a single employer under the section 448(c) aggregation rules, and the partnership has current year gross receipts greater than $5 million, then the partnership should also report its current year total gross receipts, as well as its total gross receipts for the 3 immediately preceding tax years, to that partner. See
IRS.gov/newsroom/ faqs-regarding-the-aggregation-rules-under-section-448c2–that-apply-to-the-section-[product key removed]ess-exemption. Partnerships whose current year gross receipts are less than or equal to $5 million may also use this code to report gross receipts."

Further, from the IRS partner instructions:

Partner’s Instructions for Schedule K-1 (Form 1065) (2023)
Partner's Share of Income, Deductions, Credits, etc. (For Partner's Use Only)
https://www.irs.gov/instructions/i1065sk1
About 75% of the way down:
"Code AG. Gross receipts for section 448(c). Regulations section 1.163(j)-2(d)(2)(iii) requires that partners in a partnership include a share of partnership gross receipts in proportion to their share of gross income under section 703 (unless the partnership is treated as one person under the aggregation rules of section 448(c)). Partnerships with current year gross receipts (defined in Regulations section 1.448-1T(f)(2)(iv)) greater than $5 million are required to report to their partners their distributive shares of current year gross receipts, as well as their distributive shares of gross receipts for the 3 immediately preceding tax years. If a partnership and a partner are treated as a single employer under the section 448(c) aggregation rules, and the partnership has current year gross receipts greater than $5 million, then the partnership should also report its total current year gross receipts, as well as its total gross receipts for the 3 immediately preceding tax years, to that partner. See IRS.gov/newsroom/ faqs-regarding-the-aggregation-rules-under-section-448c2–that-apply-to-the-section-[product key removed]ess-exemption.
If a partner needs gross receipts information from a partnership in order to figure the gross receipts test under section 448(c), and the partnership didn't report gross receipts on the Schedule K-1, the partner should request this information from the partnership."

one answer was to enter 0

Another answer was to enter anywhwere you need gross receipts

Unfortunatly, I didnt understand either. If yo find ot let me know