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Laura22

Solved

K-1 box 20 z

Forum|Forum|6 years ago
March 7, 2020
4 replies
0 views

My K-1 Box 20 says see statement, and then the statement says:

Description (and has numbers for each):

Ordinary Income

Self-Employment Earnings

W-2 wages

The ordinary and Self Employment numbers are the same, and slightly higher than the W-2 wages.

What do I enter in the box on Turbo Tax, or do I select Z three times and enter all three?

Best answer by ThomasM125

@Bigbak78 the STMT you see on your K-1 form means that there is a statement attached to it that includes the numbers that you are to enter in TurboTax for box 20. Code Z indicates that this is for your qualified business income (QBI) entry. You should see an amount for that on your statement, often it is the same amount as the income reported on your K-1 schedule box 1 to 3.

KathrynG3

Revisit your partnership interview.

For Box 20 Item Z: the 2019 IRS Instructions for Form 1065 Partnerships states:

page 1: "Box 20—Codes Z through AD that were previously used to report section 199A information have been changed. Only code Z will be used to report section 199A information."
page 47: "Partnerships should use Statement A—QBI Pass-Through Entity Reporting, or a substantially similar statement, to report information for each partner’s distributive share from each trade or business, including QBI items, W-2 wages, UBIA of qualified property, qualified PTP items, and section 199A dividends by attaching the completed statement(s) to each partner’s Schedule K-1. The partnership should also use Statement A to report each partner’s distributive share of QBI items, W-2 wages, UBIA of qualified property, qualified PTP items, and section 199A dividends reported to the partnership by another entity.

Please see screenshots below. You will be asked a series of questions that you can answer based on the Schedule K-1 you received. There should be a statement attached that will provide you with the information you need to answer the questions.

Apparently, your answer needs to be YES at the screen above, "We're almost done" which would be that your taxable income might exceed a threshold. If you were to answer no, you would not be providing the details requested that appear to be generating the error.

See below for the next screen after answering YES. There are intricacies to the Section 199A that TurboTax needs to calculate based on your details. Answer the questions depending on your circumstances.

Continue on through the questions.

JimmyJ1

If there is more than one separate business owned by the partnership to add under Section 199A income, how can that additional business be added? TT premier software appears to only provide interview questions to add only one separate business and not multiple businesses owned by the partnership.

paulo1

I have the same problem. Is this a glitch in the program? Does anyone know a work around?

TaxJesus

Hey all,

I think there is a much simpler fix than described in many of the previous answers, that does not require splitting into separate schedule K-1s.

All I did was open the Schedule K-1 form, scroll down to Section D1 (entitled "Qualified Business Income Deduction - Statement A Information"), and fill in the first table there. Just above the table is a line saying, "Shareholder's share of QBI or qualified PTP items subject to shareholder specific determinations". In my case, I simply needed to supply a number for "Ordinary business income (loss)" in the first line of the table, which I took as the value of Box 1 in Part 3 earlier in the Schedule. Re-ran TurboTax check, and it passed! My refund went up a bit too. 🙂

I believe this is the correct table to fill in to correct the error, because if you look at a paper version of 199A Worksheet, at the top there is a Statement A, and the lines there match the entries in the Turbotax Section D1 of Schedule K-1.

Took me over an hour to figure that out. You. Are. Welcome!

DavidS127

If there are entities reporting QBI on your tax return, it will not be prepared correctly unless you report the Section 199A information for each entity separately. That will require a separate K-1 for each passthrough entity.

The same is true if your K-1 reports income or loss in more than one of the "box 1, box 2, or box 3" lines on your K-1. That requires a separate K-1 for each of those "boxes" that report income.

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

TaxJesus

It may be the case that having multiple entities reporting QBI, or having multiple of boxes 1/2/3 filled in, are NOT THE ONLY WAYS to generate the error that is the subject of this thread. In my case, there was only one entity, and only box 1 was filled in. I had 2 items in box 20 labeled with "Z", but I ended up putting both of those on different but corresponding lines in the Section D1 table I described in my previous post.

I think there is a bug in TurboTax, where it failed to propagate the information previously entered into boxes 1, 2, 3 etc. into the Section D1 table in the full schedule K-1 form. Once I added some info there, and then went back through the interview, a new screen entitled "We need some information about your 199A income" popped up showing that table and allowing me to enter values there. That had not popped up previously. The values I entered on two lines on that screen were the two values marked as "Z" in box 20. Seems like this table should pop up whenever anyone has an entry marked Z in box 20. For now, as I suggested, you can just open the K-1 in Forms and edit section D1 directly.

Molly708276

I entered the K-1 for a partnership with two activities. I received one K-1 with the same tax id number. Box 20 has a statement showing Ordinary Loss -329

Rental Income 13,488

Unadjusted Basis 254,569

Box 20 also shows A- $122 (interest income

The program is recording the net income twice on 8995.

cookers33

Employee

My take on the code Z amounts is that the Ordinary Loss pertains to Box 1; the Rental Income and the Unadjusted Basis pertain to Box 2. Amounts in boxes 1 through 3 need to be divided into 3 separate K-1s with their accompanying amounts (as referenced above) separated per K-1. Perhaps if you segregate everything as discussed in this paragraph, the net income will only record once?

The Box 20 A will be reflected in Box 5. Sometimes it is more than Box 5 if there is non-interest investment income. If there was only interest income, Box 5 and Box 20A should be equal. Here again you would need to determine which of Box 1 through 3 that Box 20A pertains to and ONLY report it on that specific K-1 (Ordinary Business [Box 1], Net Rental Real Estate [Box 2], or Other Net Rental [Box 3]).

I would prefer if the tax pros would get back to you for their take on this topic, as well as my aforementioned question. But until that time, this (above) is what I do.