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

[DianeW777]

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.

[Wherman396]

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

[DorothyJ]

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

[Wherman396]

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

[DorothyJ]

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

[DorothyJ]

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

[Wherman396]

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

[Bill C6]

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.

[DaveF1006]

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 

[mwryan117]

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

[PatriciaV]

The Section 199A income entry screen for Schedule K-1 Box 20 allows only UBIA for "qualified property." You may need to contact the company that sent you the K-1 to confirm this is what they meant. See screenshot below (click to enlarge).

@mwryan117