How do I correctly enter Sch K-1, Box 20, Code Z, Section 199A information? Section 199A has Net rental real estate income (loss) and Qualified property.

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February 27, 2023
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On Schedule K-1, Box 20, I have codes N, Z, and AG. A statement is provided showing one value for N, two values for AG (for 2021 and 2020). Schedule K-1, Box 20, Code Z - Section 199A information shows values for Net rental real estate income (loss) and Qualified property. It seems that I get this information entered, and the Net rental real estate income (loss) value shows up on the Z line when TT asks me to "check this entry," but TT keeps flagging this with the message "Sch K-1 Wks-Partnership (Company Name): Box 20 Code Z has been selected but no Section 199A income has been entered on Statement A." and " * Not provided for in program. Manually enter on appropriate tax form." The information appears correct to me, but TT will not allow me to file as it continues to flag this as an error or incomplete information.

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Best answer by JamesG1

I think you need to enter 199A income at the screen We need some information about your 199A income.

Click the box to the left of partnership has business income (loss) and the Rental income (loss) entry box will appear.

Entering the appropriate 199A income should clear the error.

@rnlancaster

JamesG1Answer

I think you need to enter 199A income at the screen We need some information about your 199A income.

Click the box to the left of partnership has business income (loss) and the Rental income (loss) entry box will appear.

Entering the appropriate 199A income should clear the error.

@rnlancaster

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Lynn78

My K-1 has two sets of numbers for my Section 199A Information, Box 20, Code Z. The top set of numbers has a heading of "QUALIFIED (NON-SSTB) and the lower set of numbers has a heading of "SPECIFIED SERVICE" and second line of "X - SSTB"

Each set of numbers includes amounts for Income, Wages, and UBIA. Do I only enter the top set of numbers when answering the 199A section in Turbo Tax or do I total the upper and lower amounts together for each category?

Also, when I enter code Z for Box 20, do I leave the amount blank in that section of the interview?

If approximately 20% of the income is SSTB, should the SSTB checkbox on the 1065 form end up being checked or unchecked?

Thanks for any help here!

GeorgeM777

No, because your Schedule K-1 has two sets of income amounts--one which appears to be income related to a specialized service trade or business and one which is not a sstb--enter two Schedule K-1s. One Schedule K-1 will have your box 20 amount that is Non-SSTB, and the second Schedule K-1 will reflect your income that is a SSTB.

Depending on your income and from a tax perspective, the qualified business income deduction may not be impacted with your SSTB income. However, adding the amounts together may produce an unintended result, thus, keep them separate by entering two Schedule K-1s. All of the other amounts you reference in your post, i.e., income, wages, and UBIA, should be entered on their respective Schedule K-1.

@Lynn78

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jcas3

My K-1 has Box 20 Code Z which contains STMT - not a value. As I go through the TT interview for K-1s I enter that Box 20 has a code Z and I leave the value in TT blank. It then leads me though questions about Box 20 code Z which I answer. I enter the values in Wages and Qualified Property. Answer the remaining TT questions about this K-1. But when I try to efile TT says I have an error because I have box 20 code Z with no entry.

HopeS

Review your K-1 Box 20 to make sure you only select the boxes for the lines you have amounts entered. Uncheck any boxes that have no value.

To review your entries from your this K-1, open your return and click the Forms icon in the TurboTax header.

Look for K-1 Partner in the left column. Click the form name to open it in the large window.
Scroll down to Line 20 to confirm your entries for this box.
Section A below Line 21 provides input lines for the Statement A information. Complete this section to allow the info to flow to the partners'' K-1s.
To review this flow-through to K-1s, look for Statement A under Schedule K-1 (Partner Name). You should see a column on this form for the flow-through LLC's K-1 with the allocation for this partner.

If you are still unable to fix the filing error, delete the K-1 and reenter it again.

If you delete just Schedule K-1, it will regenerate if the associated worksheets are still in the return.

The proper way to delete an unwanted K-1 is from the K-1 Summary screen, which also removes the associated worksheets.

Open or continue your return in TurboTax, if you haven't already.
Using the search feature in the upper right, search for K-1 and select the Jump to link in the search results.
Answer Yes to Did you receive any Schedules K-1 or Q? Select this even if the correct answer is no.
Select Update next to the type of K-1 you initially entered (partnership/LLC, S corp, or estate/trust).
On the K-1 Summary screen, select Delete next to the K-1 you want to remove. Answer Yes on the following screen.
Select Done.