Schedule K-1 (Form 1120-S) - Other Deductions Section (Box 12)

Box 12 - Other Deductions 

Any contributions reported in Box 12, Codes A through G may affect the Qualified Business Income (Loss) coming from the partnership. 

Code A - Cash Contributions 60%

Taxpayer's share of cash contributions made by the corporation on behalf of the taxpayer. This amount pulls to line 11 of Schedule A (Form 1040), subject to the 60% AGI limitation on such contributions.

Code B - Cash Contributions 30%

Taxpayer's share of cash contributions made by the corporation on behalf of the taxpayer. This amount  pulls to line 11 of Schedule A (Form 1040), subject to the 30% AGI limitation on such contributions.

Code G - Contributions 100%

Taxpayer's share of qualified conservation contributions of property used in agriculture or livestock production. This amount will not automatically pull to Schedule A (Form 1040) or Form 8283. Instead, a manual entry must be made subject to the appropriate AGI limitation on such contributions. If you are a farmer or a rancher, you qualify for a 100% AGI limitation for this contribution. Otherwise, your deduction for this contribution is subject to a 50% AGI limitation. 

Code H - Investment Interest Expense

Taxpayer's share of investment interest expense incurred by the corporation. This amount will automatically flow to Form 4952 (Form 1040), line 1.

Code I - Deductions - Royalty Income 

Taxpayer's share of deductions allocable to royalties. This amount will automatically pull to Schedule E (Form 1040), line 19.

Code J - Section 59(e)(2) Expenditures- Manual Entry Required

Taxpayer's share of qualified expenditures that the taxpayer may make a section 59(e) election for. The corporation should provide the taxpayer with a statement that identifies the property (or properties) for which the expenditures were incurred or paid. No amount entered in this field will automatically flow to the tax return. The taxpayer can elect to either amortize these expenditures on Form 4562 and deduct the expenditures over a number of years or choose to deduct these expenditures in full in the current year and have the entire deduction treated as an adjustment or tax preference item for purposes of the alternative minimum tax.

• Based on the election that the taxpayer makes, to have the correct amount flow to Schedule E (Form 1040), line 28 or to Form 8582, a separate entry should be made on the K-1 1120-S Screen identifying the item as a Section 59(e) expenditure.
• Based on the election made by the taxpayer either the amortized amount calculated on Form 4562 or the entire amount needs to be entered as a deduction (loss) on Line 1 of the separate K-1 entry.

Code K - Reserved for Future Use

Line 12 - All other boxes