What should be reported for Code Z on box 20 of K-1 schedule?

Forum|Forum|6 years ago
February 27, 2020
3 replies
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TT asked me to enter the value of Code Z (section 199A information). The K-1 form I received shows 'STMT' on Code Z value. I am not sure what it means, but it came with 'Partner's Section 199A information worksheet' for Code Z. See the attache screenshot. Should I just enter $600 (Net rental real estate income) for Code Z? or $2,539 ($600 + $1,939 qualified property) for Code Z?

Best answer by Anonymous_

@manbeing Typically, the deduction is applicable at the shareholder level.

See https://www.irs.gov/newsroom/tax-cuts-and-jobs-act-provision-11011-section-199a-qualified-business-income-deduction-faqs

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Anonymous_

Employee

Enter the total and then enter the individual figures in the subsequent 199A screen.

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manbeingAuthor

Employee

What if the CPA who prepared the K-1 schedule said the corporate rental income is not eligible to get QBI deduction. Should I still enter the total figure for Code Z?

What I found is if I enter total figure on Code Z, TT automatically apply QBI deduction for me.

A

Anonymous_Answer

Employee

@manbeing Typically, the deduction is applicable at the shareholder level.

See https://www.irs.gov/newsroom/tax-cuts-and-jobs-act-provision-11011-section-199a-qualified-business-income-deduction-faqs

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idangold

What did you end up doing? Did you simply add up the amounts, and enter that for K1 Box 20 Code Z?

ColeenD3

Please see this answer from KathrynG:

Re: K-1 box 20 z

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.

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Jilin2020

Dear Haleika,

Thanks for your help. Is it possible to call me when you are available? I have more question with my tax return.

Hongying Zhang