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"Sch K-1 Partnership Additional Info2 Disposition of interest question 1 must be entered." I didn't dispose of interest. What should I do

Forum|Forum|6 years ago
June 7, 2019
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I did not dispose of any of my partnership last year but I get the error "Sch K-1 Partnership additional Info 2 Disposition of interest question 1 must be answered."

The next error is Part II Line 2 must be entered

Next error Part II line 3 must be entered

Since I did not dispose of any interest in the partnership what should I do?

TurboTax Premier Windows

Best answer by AmandaR1

If your K-1, has the box in the top right checked that indicates Final year return then your partnership interest is considered 'sold or disposed.'

If that's not the case, then it sounds like something may have been entered incorrectly and because of all the situations accounted for on the K-1, it can be difficult to change some answers. Therefore, it can be best to re-enter your K-1 and delete the problematic entry. To do so:

Open your return
Select the Federal Taxes tab and then click the Wages & Income tab below it (Click I'll choose what I work on)
Scroll down to the Business Investment and Estate/Trust Income section
Click Revisit/Update next to Schedule K-1
Next you'll see your K-1 entries listed. Click the bottom left button to Add another K-1. When completed, you'll arrive back at this summary screen. Click Delete to the right of the K-1 listed and the Edit option, to remove the incorrect/extra entry.

If that does not solve your issue, than there could be items reported in Part III of your K-1 that actually indicate that there was a disposal. In this case, you might have more information in an attached statement or may need to check with the business that issued you the K-1. However, often re-entering a form carefully, can fix issues.

A

AmandaR1

Employee

Also, do you have amounts in more than one box for box 1, 2 & 3 on your schedule K-1? If so, make sure you are entering your K-1 separately for each box.

C

cessna048

I have the same issue. I only have amounts entered in box 1 of all of my K-1's yet they all get this error. AFAICT, there is no information in Part III that indicates disposition of these properties either.

C

cessna048

Nevermind. I mis-understood the term Final K-1 to mean the final one for the tax year (sometimes we get multiple superceding K-1s.)

A

AmandaR1Answer

Employee

If your K-1, has the box in the top right checked that indicates Final year return then your partnership interest is considered 'sold or disposed.'

If that's not the case, then it sounds like something may have been entered incorrectly and because of all the situations accounted for on the K-1, it can be difficult to change some answers. Therefore, it can be best to re-enter your K-1 and delete the problematic entry. To do so:

Open your return
Select the Federal Taxes tab and then click the Wages & Income tab below it (Click I'll choose what I work on)
Scroll down to the Business Investment and Estate/Trust Income section
Click Revisit/Update next to Schedule K-1
Next you'll see your K-1 entries listed. Click the bottom left button to Add another K-1. When completed, you'll arrive back at this summary screen. Click Delete to the right of the K-1 listed and the Edit option, to remove the incorrect/extra entry.

If that does not solve your issue, than there could be items reported in Part III of your K-1 that actually indicate that there was a disposal. In this case, you might have more information in an attached statement or may need to check with the business that issued you the K-1. However, often re-entering a form carefully, can fix issues.

I

Idancohen500

But where in TT do i indicate that this is the final K-1?

P

Potion

I got the same error - The reason was if you import last year tax you must go back and click on the PERSON tab >>> PERSONAL INCOME >>> scroll down to BUSINESS INVESTMENT AND ESTATE/TRUST INCOME and click on update SCHEDULE K-1. Update your Form 1120S >>> EDIT >>> Is this information correct? click on NO - Even it is, keep click on continue until you get to the box "Enter percentage of ownership from box G" enter the correct info and continue. Next box for some reason default by TurboTax the first box is checked!!!! "This S corporation ended 2021" this is why you got the smart check error. If you didn't sell your business check "None of these apply". This should fixed the error.