What is 'UBIA' referenced in sec.199A, box 20 of my K-1?

Unadjusted Basis Immediately after Acquisition

See https://www.irs.gov/newsroom/tax-cuts-and-jobs-act-provision-11011-section-199a-qualified-business-income-deduction-faqs

When you are entering your Section 199A Statement or STMT information associated with box 20 code z, you'll do so on the "We need some information about your 199A income or loss" screen.  The last line on that screen "[Name of business] has UBIA of qualified property" is the one you check to "open up the box" to enter the "Unadjusted Basis of Assets" from your Section 199A Statement for box 20 code Z.

Here is a screenshot of that "We need some information about your 199A income or loss" screen:

How do I get back to this screen if I have already gotten to the end of my return and the review process?  I tried going through answering the questions, but this one did not pop up.

UBIA refers to Unadjusted Basis Immediately after Acquisition. This figure is routinely used in the calculation for the Qualified Business Income Deduction.  In most cases, UBIA is the original purchase price of the asset.

Return to the K-1 entry.  I assume that this is a partnership K-1.  In TurboTax Online follow these steps:

• Down the left side of the screen, click on Federal.
• Across the top of the screen, click on Wages & Income.
• Under Your income, scroll down to Schedule K-1 and click Edit/Add to the right.
• At the screen Tell us about your Schedule K-1, you tell the software which Schedule K-1 you received.
• Pass through several screens.
• At the screen We need some information about your 199A income, click UBIA of qualified property and enter the dollar amount.  Click Continue.

What if this information is on a Grantor Tax Information Letter from A liquidating trust.  This letter is due to my parent's trust and all of the documentation from the letter is specific for individual taxpayer entering on 1040 and associated schedules, not a 1041.

ScooterRoo, you will enter this information issued to you from a K1 issued from a 1041 Trust account. This information would be reported in Box 14 in your personal return. Here are your instructions.

1. Click on Federal Taxes > Wages & Income > I'll choose what I work on.
2. In TurboTax CD/Download:  Go to Business Investment and Estate/Trust Income, click on the Start/Update box next to Schedule K-1.   In TurboTax Online:  In the S-corps, Partnerships, and Trusts section click the Start/Update box next to Schedule K-1. 
3. Click Yes on the next screen, Schedules K-1 or Q.  
4. On the Tell Us About Your Schedules K-1 screen.  Click the Start/Update box next to the type of entity that issued the K-1 (S-Corps, Partnerships, Trust/Estate).
5.  Here you will select Trust/Estate 
6. If you haven't started entering K-1 information, continue through the screens, entering the requested information
7. When you followed the instructions given to you above, scroll through the entries and enter your information. You will reach a screen that says Check Boxes that have an amount. Be sure Box 14 is selected, in addition to any other Box that may have  information about the K1.
8. Eventually you should arrive at a screen that says enter Box 14 information. Here you will select I-Section 199 information. Leave the amount blank. Here is where you will start to enter information that is on your grantor letter.
9. Press continue at the bottom.
10. You will pass trough two screens but eventually arrive at a screen that says We see you have Section 199A income. Here is where you start entering information that is on your grantor letter. The information you enter will automatically generate a 8995 and allow you to claim a Qualified Business Deduction on your return

Thank you so much for this information!  I need to enter Grantor Letter info from HGR Liquidating Trust (actually 2 letters, one for my account and another for a joint account).  I followed your instructions and got to the screen for entering the 199A info.

According to the Letter, I also need to enter 2  other categories:  1) Capital Gains Information including "Business Property Gain or Loss" & "Unrecaptured Section 1250 Gain" (these 2 fields show the same dollar amounts in each of the Letters) and 2) Miscellaneous Income Information ("Partnership Income from Passive Activities").

Is there another box or boxes I need to check in the K1 section in order to enter these amounts?

---

@DorothyJ wrote:

Is there another box or boxes I need to check in the K1 section in order to enter these amounts?

---

The other two categories (on the K-1 entry) would be Line 9c (unrecaptured Section 1250 gain) and Line 10 (Net section 1231 gain (loss)).

I followed the directions given by DaveF1006 & entered all the numbers from the Grantor Letter by generating a K1 as Dave describes.  I checked boxes 1-5 and box 14 on his Step 7.  This gave me places to enter all the numbers.  

Problem: on the Schedule E generated from my K1 entries, the "Partnership Income from Passive Activities" is entered under the "Active" column instead.  (note: the active & passive numbers flow down to the same spot.)  Schedule E also shows this income as belonging to the Liquidating Trust as opposed to the REIT Properties LP as indicated on the Grantor Letter.

Bottom line: I did this for both of the Grantor Letters I received from HGR Liquidating Trust and it made zero difference to what I owed.

---

@DorothyJ wrote:

Problem: on the Schedule E generated from my K1 entries, the "Partnership Income from Passive Activities" is entered under the "Active" column instead.  (note: the active & passive numbers flow down to the same spot.)  Schedule E also shows this income as belonging to the Liquidating Trust as opposed to the REIT Properties LP as indicated on the Grantor Letter.

---

That is most likely because you entered the GIS as a K-1 from a trust rather a K-1 from a partnership. 

For your purposes, the entity does not matter in the least; you need to enter the figures on the proper lines (boxes) in TurboTax so they flow to the correct forms. 

For example, had you entered the K-1 as if it had been issued by a partnership (1065), you would have been able to select that you were a limited partner and that you did not materially participate. As a result, Schedule E would appear as "passive" and the name of the LP would be displayed.

Thank you, tagteam!

Thanks but I just don't see it. When I go to the K-1 for Partnerships, I don't even see a selection for Box 1-5 much less being able to determine what goes where if I got there. I did get to the Box 14 part for the UBIA but the others not so much. So you got it to populate a form 4797? 

---

@Jacker wrote:

.....I did get to the Box 14 part for the UBIA but the others not so much.....

---

If you got to the part for the UBIA and it was Box 14, you were not in the K-1 for Partnerships section; you were in the K-1 for trusts/estates section.

The UBIA for partnerships would be Line 20 with a Z code for a K-1 (1065).

I have a K-1 and on line7 net rental estate income it has $8,124 on the atached qualified business incomepass-through statement A it shows rental income of $7,936 and UBIA of qualified property $2,717.. When compleeing the turbo tax work sheets where do I enter these figures?

When entering your K-1 (Form 1065), you will complete line 20, and it will ask for this information when code Z is used. This term is used in connection with the qualified business income deduction (QBID) and is used to determine your eligibility and amount of the deduction allowed.  

Unadjusted Basis Immediately After Acquisition (UBIA) is referencing the total cost of all the assets of the business at the amount of cost at the time they were placed in service without regard to the depreciation expense.

Qualified Business Income

• The qualified business income deduction (QBID) may be taken by eligible taxpayers, including individuals and some trusts and estates. The deduction is determined at the partner level. Partnerships are required to report information necessary for their partners to figure the deduction. Use code Z with an asterisk (Z*) on each partner’s Schedule K-1 and enter “STMT” in the entry space to indicate that the information is provided on an attached statement that separately identifies the partner’s distributive share of:
  • Qualified items of income, gain, deduction, and loss;
  • W-2 wages;
  • Unadjusted basis immediately after acquisition (UBIA) of qualified property;
  • Qualified PTP items; and
  • Section 199A dividends, also known as REIT dividends.

Other items reported on this line can be reviewed to see if any are applicable to your partnership return.

Hi DorothyJ,

I corresponded with you last year on the HGR Liquidating Trust Grantor letter.. I was wondering if you are working on this years Grantor letter.   I entered the information as a Trust/Estate.  

What is your plan ?

Thanks

Warren

Hi Warren, 

I plan to enter the Hines Grantor Letter info exactly as I did last year: as a K-1 trust.  This is going by the instructions in that long PDF that Hines sent out last year. 

Did you receive the letter from Hines stating that they sold the final property in the Liquidating Trust on March 17?  So next year will be the final year we'll have to deal with this on our tax returns...yippee!

Dorothy

Hi Dorothy,

Believe it or not, for the most part, I actually forgot what we did last year.  Can you refresh my memory?

And , yes we received the March 17th letter and am glad I will be done with this next year.  My return is so easy without HGR. 

Thank you in advance.

Warren

Hi Warren,

If you call Hines Investor Relations at [phone number removed] and request their Turbo Tax Guide pdf for entering the Grantor Letter info, they will email it to you immediately, (at least they did last year).  I don't have a Business version of Turbo Tax, so I started at Step 10 of the pdf instructions suggest.  It's pretty easy.

Dorothy

Okay, so Turbo Tax removed the Hines phone number but you can get it by googling Hines Investor Relations

Thank you for the quick response.  I will call Monday.  If I remember from last year, their instructions weren’t accurate, perhaps they updated.  I don’t have the business edition either, just Premier.

warren

Receiving an error message when performing smartcheck on K1. Indicates no dollar amount on Schedule A when I can clearly see the amount that has been entered. K1 line 20 Z. Schedule A of K1 shows ordinary income, with no problem and UBIA of qualified property with an amount of $500. I have entered this but when running check it keeps posting an error and taking me back. I have been around the "circle" several times. Any advice?

Thank you.

You may need to do additional work to complete this section. To enter the information, go to;

1. Go to federal>wages and income>>Schedule K1
2. Enter information on your form in accordance with the questions asked.  
3. After entering the information regarding your K-1.  Enter information if any in Boxes 1,2, and 3. Check the box that indicates there are amounts in more than Boxes 1,2, &3.
4. Check Box 20 and press continue.
5. Pick code Z from the drop down, if there is no amount to enter next to it, leave blank. If there is a 0, remove it. Turbo Tax will determine that amount from the questions that follow. press continue.
6. Continue through the questions. Be sure to mention that your investment is at risk.
7. And then continue through the questions. As I mentioned above, some of the information required to complete section 20 is mentioned in the supplemental statements that came with the K-1.
8. The place to enter the UBIA is in a screen exactly the the screen shown below.

If you did this correctly and still receive errors, please reach out to us.  You may have recorded this somewhere else but the steps that i outlined are correct for reporting this correctly.

@Bill C6 

Hi - my screen looked similar to the example you showed, BUT it was missing the "net rental real estate income (loss) option", which is the one I need - do you know why that would be missing?   I only have two items showing in my 199A - rental and a line called "Qualified Property" (it does NOT show UBIA, which is why I was searching this in the first place). Thank you!

Mike