How do I answer the Qualified Cooperative Payments question?

Forum|Forum|6 years ago
March 15, 2020
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I have never had this question before and I am not sure how to answer. It wants the net income and wages from this business that are allocated to qualified cooperative payments. This is for my farm. How do I come up with the answer....put the total of my patronage payments from my 1099-PATR again?

TurboTax Home & Biz Windows

Best answer by DianeC958

You determine this number by taking the amount you received on the 1099-PATR and dividing it by the total amount of revenue you received. This will give you a percentage. Take the net income and multiply the net income by this percentage. This is the amount of net income that is allocable to the qualified payment.

For example you have $10,000 in income from 1099-PATR and $30,000 in other income.

Take $10,000/ $40,000 = .25. If you net income is $20,000, take the $20,000 x .25 equals $5,000. This is the amount of net income that is allocable to the qualified payment.

DianeC958

Yes, the payments that are reported on your 1099-PATR are Cooperative payments.

To enter a 1099-PATR for farm or co-op dividends:

Open (continue) your return in TurboTax.
Inside TurboTax, search for 1099-PATR (be sure to include the dash) and then select the Jump to link in the search results.
Follow the instructions to enter info about your farm.
When you get to Your Farming Income and Expenses, you will enter your 1099-PATR info in Livestock, grain, produce, custom work, co-ops.

Instructions for Form 1099-PATR

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Plainsman2

After we put in the 1099-PATR entries TurboTax comes back and says "You told us you received $XXX of taxable cooperative distributions. Then it asks "Net income allocable to qualified payment" (fill in the blank). How do we determine this number?

DianeC958Answer

For example you have $10,000 in income from 1099-PATR and $30,000 in other income.

Take $10,000/ $40,000 = .25. If you net income is $20,000, take the $20,000 x .25 equals $5,000. This is the amount of net income that is allocable to the qualified payment.

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"