Turbotax 2019 does not allow negative number in Indiana K-1 form line 19

Forum|Forum|5 years ago
July 5, 2020
2 replies
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Hello,

I'm a resident of CA but need to file an Indiana non-resident return because of an Indiana-based partnership I have. The Indiana K-1 form (IT-20S/IT-65 2019 Schedule IN K-1) I received from the partnership's CPA has a negative number in line 19 (under Part 4 - State Modifications); the associated "code" for this K-1 entry is 142. When I try to enter this number into Turbotax (in the Indiana state tax tab, directly on the form) I get an error message saying "the value entered must be equal to or greater than 0."

Any guidance would be appreciated.

Thank you!

DavidS127

Code 142 is for Excess Federal Interest Deduction Modifications per the IN Form 65 instructions (see on page 9 of this PDF😞

"Excess Federal Interest Deduction Modification (3-digit code: 142) - IRC Section 163(j) limits the federal interest deduction for most business interest to 30% of adjusted taxable income plus business interest. However, Indiana decoupled from this provision. Subtract an amount equal to the amount disallowed as a federal deduction for excess business interest in the year in which the interest was first paid or accrued. Add back any amount of excess taxable income (as defined in IRC Section 163(j)(4)(C)) determined at the entity level.business interest expense deduction limited (i.e., not allowed) for federal purposes, but allowable as deduction for Indiana."

Because your entry is a negative number, it is a subtraction and thus is likely the excess business interest you couldn't deduct for federal purposes. Try to enter the amount without the minus sign in the section on subtractions, and check to make sure that amount was subtracted from federal income.

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Koala BearAuthor

Hello,

I have the same problem this year. If I enter the negative number without the minus sign (i.e. as a positive number) the amount is added to the other lines which is wrong --- it should be subtracted. Consequently the AGI in line 10 of the Indiana K-1 form does not match the number Turbotax calculates.

Any suggestions would be appreciated.

Thank you!

nathanrthomas

Anyone solve this issue? I had/have the same issue on the 2020 tax return

vidaldiego

I have the same issue now in Oct/2024. TurboTax never fixed the bug.

jer1556

Is there any update on a fix for this issue? I have an Indiana K-1 (IT-20S/IT-65). The form provided to me shows a negative number in Part 4, line 7 for code 641. TurboTax (desktop product) will not allow me to enter a negative number. The instructions provided by the state are clear that a negative number is allowed (quoted from the Instruction Booklet below). The software won't even permit an "override" for that line. How do I file if I can't even enter the information?

"Part 4 – State Modifications
Lines 1-7. Enter the Indiana modifications from the front of
Form IT-65, lines 2a through 2c (and any additional sheets) as
percentage applied. In the case of nonresident individuals, enter
them as apportioned. List the pro rata share amount of each
modification on the appropriate line. (Use a negative sign to
denote negative amounts.)"