How to enter multiple Sec 199 passthru entities

Forum|Forum|6 years ago
April 2, 2020
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On a K-1 I received there are multiple pass-thru businesses owned by the partnership listed that have Sec 199 Incomes. I have not found a way to enter more than 1 pass-thru entity under Box 20, Code Z after clicking 'The Income comes from another business'. Am I missing something?

Best answer by DaveF1006

If there are multiple businesses to report, you will need to produce a K1's for each of those businesses:

You will report the first K1 with the partnership information, EIN etc. Also you will record all the boxes that have income in them (1-20) Record code Z in the first K1 and report the income comes from another business. You will then be asked to record the name and EIN of that business and then fill in the remaining information regarding the 199A income.
To record the second business, create another K1 with the information about the partnership but leave the boxes blank except for Box 20 Code Z information. Here you will record the information about the business, EIN, and so on and so forth.
Repeat this process until you finish reporting all of the multiple businesses that has eligible 199A section income reported on that single K1 sent to you by the partnership.

DaveF1006Answer

If there are multiple businesses to report, you will need to produce a K1's for each of those businesses:

You will report the first K1 with the partnership information, EIN etc. Also you will record all the boxes that have income in them (1-20) Record code Z in the first K1 and report the income comes from another business. You will then be asked to record the name and EIN of that business and then fill in the remaining information regarding the 199A income.
To record the second business, create another K1 with the information about the partnership but leave the boxes blank except for Box 20 Code Z information. Here you will record the information about the business, EIN, and so on and so forth.
Repeat this process until you finish reporting all of the multiple businesses that has eligible 199A section income reported on that single K1 sent to you by the partnership.

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sbilyeu

To be clear, in your second instruction below, when you say "create another K1 with the information about the partnership", do you mean create a second K1 for the original partnership that is reporting multiple businesses on their 199A schedule?

2. To record the second business, create another K1 with the information about the partnership but leave the boxes blank except for Box 20 Code Z information. Here you will record the information about the business, EIN, and so on and so forth.

sbilyeu

Never mind, I believe I found your answer in a reply to a similar message:

You are going to need to report this on another K1 even though it is the same partnership. In the second K1, you will need to fill out the name and EIN of the partnership but then you only report the transaction in box 20 regarding the second business.

Max_defender

I have many (~20) passthrough entries. It is rental real estate LLC.

Some entries has:

Rental income, W-2 wages, , unadjusted basis of assets.

others have section 1231 gain, "other income"

Of the 3-4 numbers, which goes in to the box 20, code z field?

Looks like I need a K1 for each entry? Horrible!

JamesG1

I assume that this is a partnership? It does sound like you will be entering multiple K-1 entries.

Follow this procedure for a partnership K-1 with box 20 code Z:

Enter your code Z on the box 20 screen. You don't need to enter an amount on that box 20 screen, but you do need to click Continue after you have entered the code Z. It does not hurt anything if you have an amount on the box 20 screen for code Z, but the amount you enter there is not processed.
The next screen is Describe the Partnership and the next screen is We see you have Section 199A income and then you should get We need some information about your 199A income, followed by Let's check for some uncommon adjustments. When you get to those last two screens, when you check the box on a line, other boxes will open up to enter the amounts from your Section 199-A Statement/STMT.

Many times you enter:

Ordinary business income (loss) from the business,
W-2 wages for this business, and
UBI of qualified property for this business.

Your K-1 may be structured as follows where box 1 or box 2 reports the total of the three entities but attachments break out the income by entity.

K-1 Main partnership A B

Box 1 1,000 500 200 300

During the first part of the K-1 entry, all the separate K-1s use the name, address, and EIN of the main partnership shown on the K-1 you actually received. Enter each additional Schedule K-1 just like the first. Capital information is only reported on the main partnership.

At the screen We see you have Section 199A income,

You will click The income comes from the partnership that generated this K-1 for the main partnership,
You will click The income comes from another business for the other two partnerships.

The separate section 199-A statement that you received for box 20 code Z should already split the Section 199-A amounts between the entities, so you enter the Section 199-A amounts for each entity on the K-1 you have created for that entity.

Note that when you enter each K-1, you will encounter the question Is the business that generated the Section 199-A income a separate business owned by the partnership? screen. TurboTax is asking if the Section 199-A income was passed through to the partnership sending you the K-1 by another partnership, S-Corp, or trust; versus being generated by the business operations of the partnership that sent you the K-1. So, on one of the K-1s you enter you will answer that it is from the main partnership, and on the others you will enter that it is from a pass through entity. TurboTax will ask for the name and EIN of each pass through entity.

See also this TurboTax Help.

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ren12

@JamesG1

Thank you for the informative post. So to clarify, lets say I received a K1 from "Company A" and in box 20 I have code "Z" . Code Z takes me to Section 199 A, where there are several items such as rental income, W-2 wages, etc from a passthrough entity we'll call "Company B".

I put all of the information from "Company A" who issued my K1 into Turbotax such as EIN, and the amounts listed in boxes 1-20 which takes me to a screen that says "We see you have section 199A income". Do I click the "This income is from another business" radio button and then put in the pass through entity Name ("Company B") and EIN in the next page and the amounts from the 199A form?

Then when this is complete, I go back and select "Add Another K-1" and complete a second K1 using the passthrough entity information (Name, EIN, etc.) for "Company B". But where do I type in the rental income, W2 wages, etc. from "Company B"?

Thank you.

DaveF1006

It depends. Yes, one of the passthroughs can be listed on the original K1 so that you only have a total of five K1 entries. Boxes 2 and Box 10 should only be reported also on the initial K1. The remaining 4 K1's just should have the partnership information and the information in Box 20 code Z. The remaining four should have no information other than that.

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peterbleyAuthor

So I guess more people have that problem now than when I posted it some time ago... I guess there really is not an easy work around for anybody that is a LP in a Real Estate LP with (what they all have...) multiple Sec 199 sub-ventures...

Hopefully Intuit will decide on not doing 'absolutely necessary' updates on TurboTax but also do important ones for a minority, but important, customer group....