Profit & Loss % "VAR"

Forum|Forum|3 years ago
February 17, 2023
1 reply
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In 2021, some of my partners had negative participation in profits. The Beginning and Ending Profit & Loss fields on their K-1's (prepared in TurboTax Business) read "VAR". I don't remember how I did that.

For 2022, TurboTax is requiring that I have positive numbers in those fields. How can I get "VAR" into those fields again?

TurboTax Business Windows

PatriciaV

Employee

Yes, TurboTax requires profit & loss percentages to be positive numbers or zero. If profits are allocated to some partners and losses to other partners, TurboTax may have replaced a negative percentage with "VAR" to avoid a math error.

To correctly allocate profits and losses, be sure to review each partner's information and look for the "Member Percentage" page. Here you can enter positive percentages (or zero) separately for profits and losses. For instance, a partner who receives only profit might have 25% in Profit % and 0% in Loss %. Likewise, a partner who receives losses might have 0% in Profit % and 25% in Loss %.

To accurately allocate profit & loss when some partners receive only losses, be sure to indicate that income is allocated based on Loss Percentage.

You can confirm the allocations in Forms Mode. The allocation summary appears on the Sch K Reconcile worksheet.

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ericbro1Author

So if I leave the negative numbers in there, TurboTax will produce "VAR"?

PatriciaV

Employee

No, you can enter only positive numbers. A member cannot be allocated a negative percentage of income. But you can allocate a positive percentage of a loss, which results in the "negative" income.

TurboTax enters "VAR" during the import/transfer process when the net income allocation is calculated. Mathematically, negative income divided by positive total income results in #NA, which TurboTax converts to "VAR."

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