Schedule K-1 (Form 1065) Box 20 Codes – Support

To report your Schedule K-1 Form 1065 box 20 codes regarding other information, please refer to the instructions below.

Codes A & B - Investment Income & Expense

This amount reported for box 20 code A, is the taxpayer's share of investment income (interest, dividends, etc.) from the partnership. Box 20 code B reports the taxpayer's share of investment expenses. The amounts from codes A and B are used to complete Form 4952 by going to: Federal > Deductions (Select my forms) > Itemized Deductions > Less Common Deductions > Investment Interest

Code C - Fuel tax credit information (Not Supported)

Amounts reported in Box 20, Code C may need to be reported on Form 4136. No amount entered in this field will flow to the Form 4136. TaxSlayer does not support Form 4136.

Code D - Qualified Rehabilitation Expenditures (other than rental real estate)

The taxpayer's share of qualified rehabilitation expenditures and other information needed to complete Form 3468. To locate Form 3468, go to: Federal > Deductions (Select my forms) > Credits > Investment Credit > Rehabilitation Credit Under Section 47

Code E - Basis of Energy Property

The amount reported in Box 20, Code E may be needed to calculate the Investment Credit available on Form 3468. To locate Form 3468, go to: Federal > Deductions (Select my forms) > Credits > Investment Credit > Energy Credit Under Section 48

Codes F & G- Recapture of Low-Income Housing Credit

Code F Represents the Low-Income Housing Credit recapture amount due to a disposition or basis change, typically for a partnership that has more than 35 partners, and this amount may be reported on Form 8611. Code G represents the Low-Income Housing Credit recapture amount due to a disposition or basis change typically for a partnership that has less than 35 partners. Both codes are reported on Form 8611. To locate Form 8611, go to: Federal > Other Taxes > Recapture of Low-Income Housing Credit

Code H - Recapture of investment credit

This information is provided by the partnership to calculate recapture tax on investment credits previously claimed. Recapture occurs if the property is disposed of or its use changes before the end of the compliance period. The amount reported in Box 20, Code H may need to be reported on Form 4255. To locate Form 4255, go to: Federal > Other Taxes > Recapture of Investment Credit > Property Recapture Information

Code I - Recapture of other credits Not Supported

The amount reported in Box 20, Code I represents the recapture of other business credits that may need to be reported on Form 1040. These may include the New Markets Credit, Employer-Provided Childcare Facilities and Services Credit, Alternative Motor Vehicle Credit, etc. To report the recapture, go to: Federal > Other Taxes > Other Additional Taxes > report the amount inside the corresponding box and continue.

Code J - Look back interest - completed long-term contracts

Amounts reported in Box 20, Code J are reported on Form 8697. However, we do not support Form 8697, so you must report it as an "Other Tax" adjustment so it flows to Schedule 2 of your return. To report an "Other Tax" adjustment, go to: Federal > Other Taxes > Other Additional Taxes > Long-Term contracts interest computation under the Look-Back Method (8697)

Code K - Look back interest (Income Forecast Method)

Amounts reported in Box 20, Code K are reported on Form 8866. However, we do not support Form 8866, so you must report it as an "Other Tax" adjustment so it flows to Schedule 2 of your return. To report an "Other Tax" adjustment, go to: Federal > Other Taxes > Other Additional Taxes > Interest computation under the Look-Back Method (8866)

Code L - Disposition of property with section 179 deductions

Amounts reported in Box 20, Code L may need to be reported on Form 4797. See the partner's instructions provided by the partnership for further information on the treatment that these items will receive. To complete Form 4797, go to: Federal > Income (Select my forms) > Less Common Income > Form 4797.

If the disposition was due to casualty or theft, report code L using Form 4684. Federal > Deductions (Select my forms) > Itemized Deductions > Casualties and Losses

If the sale was an installment sale, report code L using Form 6252. Federal > Income (Select my forms) > Less Common Income > Form 6252

Code M - Recapture of Section 179 deduction

The amount reported in Box 20, Code M is the taxpayer's share of any recapture of section 179 expense deduction if the business use of the property dropped to 50% or less. See the partner's instructions provided by the partnership for further information on the treatment that these items will receive. To report the recapture, use Form 4797 by going to: Federal > Income (Select my forms) > Less Common Income > Form 4797 > Enter your recapture amount under the "Recapture Under Section 179 (Part IV)" section.

Code N - Business Interest Expense (BIE)

Amounts reported in Box 20, Code N are not reported on Form 1040. This amount is reported elsewhere on the Schedule K-1 and the total amount is reported here for information only.

Code O - Section 453(l)(3) Information

Code O represents details needed to calculate interest due under section 453(l)(3) for certain timeshares and residential lots sold on the installment method. To report this amount, go to: Federal > Other Taxes > Other Additional Taxes > Enter the amount in the box labeled "Interest on tax due on installment income from sale of lots & timeshares."

Code P - Section 453(A)(c) Information

The amount reported in Box 20, Code P is the taxpayer's share of taxes as a result of the gain on sale of certain assets (property with a sales price over $150,000) on an installment basis. To report this amount, go to: Federal > Other Taxes > Other Additional Taxes > Enter the amount in the box labeled "Interest on deferred tax on gain from installment sales over $150,000."

Code Q - Section 1260(b) Information

The amount reported in Box 20, Code Q is the taxpayer's share of taxes as a result of the gain on the sale of assets on an installment basis. To report the additional tax, go to: Federal > Other Taxes > Other Additional Taxes > Scroll to the bottom and enter your amount under "Any other tax" with "1260b" as the description.

Code R - Interest Allocable to Production Expenditures

The amount reported in Box 20, Code R is the information that the taxpayer needs to capitalize any interest related to production expenditures under Section 263A. You report this information as an "other expense" on a Schedule C, E, or F. To do so, go to: Federal > Income (Select my forms) >

For Schedule C, select Profit or Loss from Business from the Income page
For Schedule E, select Profit or Loss from Rentals and Royalties from the Income page
For Schedule F, select Profit or Loss from Farming from the Income page

Code S - Capital Construction Fund (CCF) Nonqualified Withdrawals

The amount reported in Box 20, Code S is the taxpayer's share of nonqualified withdrawals from a capital construction fund (CCF). To report this amount on your return, go to: Federal > Other Taxes > Other Additional Taxes > Enter the amount under "Any other tax" at the bottom of the page and use "CCF" for the description.

Code T - Depletion Information - Oil & Gas

Amounts reported in Box 20, Code T is information the taxpayer needs to figure their share of any depletion deduction. To report this amount on a Schedule E, go to Federal > Income (Select my forms) > Profit or Loss from Rentals and Royalties > Expenses > Enter amount in the box labeled "Depletion"

Code U - Section 743(b) basis adjustment

The partnership will provide your section 743(b) adjustment, net of cost recovery, by asset grouping. Code U does not require a separate entry as it is information only. You do not report the amount for code U on your return.

Code V - Unrelated Business Taxable Income (Not Supported)

The amount reported in Box 20, Code V is the information that is provided to tax-exempt organizations. This section is not applicable to Form 1040. This information is reported on Form 990-T, which is not an individual income tax form, so our software does not support the entry.

Code W - Precontribution gain (loss)

The amounts reported in Box 20, Code W is information regarding any property that was distributed to a partner, other than the original contributing partner. In this event, the contributing partner (taxpayer) must recognize any gain or loss on Form 8949/Schedule D or Form 4797 in accordance with information provided by the partnership. See the partner's instructions provided by the partnership for further information on the treatment that these items will receive.

If reporting a capital gain/loss, use Schedule D by going to: Federal > Income (Select my forms) > Investments > Stocks, Mutual Funds, Cryptocurrency, Collectibles, etc. >

If reporting a section 1231 gain or loss, use Form 4797 by going to: Federal > Income (Select my forms) > Less Common Income > Form 4797

Code X - Payment obligations including guarantees and deficit obligations (DROs)

Code X reports payment obligations related to partnership liabilities. These obligations include Recognized guarantees of partnership debt and Deficit Restoration Obligations (DROs). This information is not reported on your return. You simply use the information to keep track of your basis.

Code Y - Net Investment Income

Amounts reported in Box 20, Code Y is the information that is provided to the taxpayer to determine their net investment income tax under section 1411. To report this information on your return, go to: Federal > Other Taxes > Net Investment Income Tax.

Code Z – Section 199A Information

Amounts reported in Box 20, Code Z is the information needed by a partner/taxpayer to claim the Qualified Business Income Deduction. The information reported may consist of some or all of the following items.

Section 199A income –This is the Qualified Business Income (QBI) which is generally defined as income that is related to the partnerships business activities and it does not include investment income or guaranteed payments to partners for services rendered to the partnership. The amount entered will automatically pull to the applicable Qualified Business Income Deduction (QBID) form (Form 8995 or Form 8995-A) under the Tax Computation Menu and used to calculate any QBID.
Section 199A W-2 Wages – are the wages paid by the partnership that were reported to the Social Security Administration on a W-2. The amount entered as W-2 Wages does not carry to Form 8995 - Qualified Business Income Deduction Simplified Computation because W-2 Wages are not used to calculate the QBID for taxpayers that are permitted to use Form 8995 because the taxpayer's income is below certain thresholds. This amount will automatically pull to Form 8995-A - Qualified Business Income Deduction under the Tax Computation Menu and is used in the calculation of the QBID for taxpayers above the taxable income thresholds.
Section 199A unadjusted basis - This is the unadjusted basis of qualified property held by the partnership. Qualified property is generally defined as the original cost of assets that were placed in service by the partnership in the past ten years and still used by the partnership and the original cost of assets still being depreciated by the partnership because the recovery period is greater than ten years. The amount entered as unadjusted basis of Qualified Property does not carry to Form 8995 - Qualified Business Income Deduction Simplified Computation because it is not used on that worksheet to calculate the QBID for taxpayers that are permitted to use Form 8995. This amount will automatically pull to Form 8995-A - Qualified Business Income Deduction under the Tax Computation Menu and is used in the calculation of the QBID for taxpayers above the taxable income thresholds.
Section 199A REIT dividends - This is the REIT dividends received by the partnership. This amount will automatically pull to the applicable QBID form under the Tax Computation Menu and is used in the calculation of the QBID.
Section 199A PTP income - This is the Publicly Traded Partnership income reported by the partnership. This amount will automatically pull to the applicable QBID form under the Tax Computation Menu and is used in the calculation of the QBID.

Code AA – Section 704(c) information

Amounts reported in Box 20, Code AA is informational. It represents the net income or loss effect that a partner who has contributed property with a built-in gain or loss bears. This amount is not pulled to the tax return, and for additional information see the partner's instructions.

Code AB –Section 751 gain (loss)

Amounts reported in Box 20, Code AB represents the partner's share of gain or loss on the sale of the partnership interest that is subject to being taxed at ordinary income rates and not capital gain rates. This amount is not automatically pulled to the tax return, To enter the amount, go to: Federal > Income (Select my forms) > Less Common Income > Form 4797.

Code 20 AC – Section 1(h)(5) gain (loss)

Amounts reported in Box 20, Code AC represents the partner's share of gain or loss on the sale of the partnership interest that is subject to being taxed at the rate for collectible assets. To report this amount, go to: Federal > Income (Select my forms) > Investments > Stocks, Mutual Funds, Cryptocurrency, Collectibles, etc. > Choose to enter manually > Enter the information as it pertains to the sale, and make sure to check the box that reads "Is this a Collectible Exchange" at the bottom of the page.

Line 20 AD – Deemed section 1250 unrecaptured gain

Amounts reported in Box 20, Code AD represents the partner's share of gain or loss on the sale of the partnership interest that is subject to being taxed at the rate for unrecaptured section 1250 gain. This amount is not automatically pulled to the tax return, and for additional information see the partner's instructions.

Code AE – Excess taxable income

Amounts reported in Box 20, Code AE is the excess taxable income determined by the partnership for the purpose of the limitation placed on the partnerships ability to deduct business interest. You do not enter this information anywhere in the program. If you have business interest expense and are required to apply §163(j), you must manually compute the limitation using IRS Form 8990 outside the program and attach it to your return if filing by mail.

Code AF - Excess business interest income

Amounts reported in Box 20, Code AF represent the business interest that was subject to a business interest limitation at the partnership level. This works the same as code AE, you do not enter it anywhere in the program as it is information only.

Code AG - Gross Receipts for Section 59(A)e

The amount shown represents the partner's distributive share of the partnership's current year gross receipts. See here for more information about what this number is for. This code does not require a direct entry on the tax return for most taxpayers. This code is informational only unless you are determining whether you qualify for the small business exemption under §163(j), or aggregation rules under §448(c).

Code AH - Noncash Charitable Contributions

Box 20, Code AH reports your share of the partnership’s noncash charitable contributions, limited to your outside basis under §704(d)(3). To report the contribution, go to: Federal > Deductions (Select my forms) > Itemized Deductions > Donations to Charity > Noncash Donations.

Code AI - Interest and Tax on Deferred Compensation to Partners

Code AI reports your share of interest and additional tax on compensation deferred under a nonqualified deferred compensation plan that fails §409A requirements. To enter this information on your return, go to: Federal > Other Taxes > Other Additional Taxes > Non qualified deferred compensation plan fails to meet section 409A requirements

Code AJ - Excess business loss limitation

Code AJ provides your share of aggregate gross income/gain and aggregate deductions from all partnership trades or businesses. To report this information on your return, go to: Federal > Income (Select my forms) > Less Common Income > Form 461.

Code AK - Gain from mark-to-market election

This code reports ordinary gain or loss from securities or commodities trading activities when the partnership has elected under IRC §475(f) to apply the mark-to-market method. These gains/losses are treated as ordinary income, not capital gains. To report this on your return, go to: Federal > Income (Select my forms) > Less Common Income > Form 4797.

Code AL - Section 721(c) partnership

Code AL represents amounts related to remedial items under the remedial allocation method for property contributed to a partnership by a U.S. transferor under IRC §721(c). This code should not require a separate entry as the remedial income should already be included in box 1 of your Schedule K-1. If a gain is due to acceleration or section 367 transfer applies, you must manually report the transaction on Form 4797 or Schedule E depending on the nature of the gain.

To locate Form 4797, go to Federal > Income (Select my forms) > Less Common Income > Form 4797.

To locate Schedule D, go to Federal > Income (Select my forms) > Investments > Stocks, Mutual Funds, Cryptocurrency, Collectibles, etc.

Code AM - Section 1061 Information

This code provides information needed to apply the carried interest rules under IRC §1061. These rules affect partners holding an Applicable Partnership Interest (API)—generally interests received for services in investment or fund management. Code AM is informational only unless taxpayer has an API subject to §1061. If you need to report an API subject to §1061, first adjust long-term capital gains using the Section 1061 Worksheet. To report the capital gain, go to: Federal > Income (Select my forms) > Investments > Stocks, Mutual Funds, Cryptocurrency, Collectibles, etc.

Code AN - Farming and fishing business

Code AN reports your distributive share of gross income, gains, losses, and deductions from farming or fishing activities. If income averaging is not elected, these amounts are already included in Box 1 or Box 2 of Schedule K-1 and require no separate entry. However, if you elect to use income averaging under IRC §1301, you must report the information on Schedule J. We do not support Schedule J, so you must manually prepare it and attach it to your return before paper filing as you cannot E-file the manually prepared Schedule J.

Code AO - PTP Information

This code provides information a Publicly Traded Partnership (PTP) needs to determine if it meets the 90% qualifying income test under §7704(c)(2). This is information only and does not get reported anywhere on your return.

Code AP - Inversion Gain

Code AP reports amounts of income or gain classified as inversion gain under IRC §7874. The inversion gain should already be included on your Schedule K-1's income and does not require a direct entry on your return. However, if you have a Net Operating Loss, you must exclude the inversion gain from your NOL calculation, and if you are claiming the Foreign Tax Credit, you treat the inversion gain as US-sourced income.

Code AQ - Conservation Reserve Program (CRP) Payments

Code AQ reports your share of CRP payments received by the partnership. If you receive Social Security retirement or disability benefits, your portion of CRP payments is not subject to self-employment tax. To report your share of CRP payments, go to: Federal > Income (Select my forms) > Profit or Loss from Farming > Enter the amount in the box labeled "Agricultural program payments."

If your CRP payments are not subject to self-employment tax, go to: Federal > Other Taxes > Self-Employment Tax > Enter the amount to exclude in the box labeled "Conservation Reserve Program payments."

Code AR - IRA disclosure

Code AR reports an IRA partner’s unique EIN when the partnership also reports an amount under Code V. This is informational only and does not get reported on your return.

Code AS - Qualifying advanced coal project property and qualifying gasification project property

This code reports your share of the basis in qualifying advanced coal project property and qualifying gasification project property. These amounts are used to calculate the Advanced Coal Project Credit and Gasification Project Credit under IRC §48A and §48B, respectively. To report your share, go to: Federal > Deductions (Select my forms) > Credits > Investment Credit > Qualifying Advanced Coal and Gasification Project Credit > Unused Investment Credit from Cooperatives.

Code AT - Qualifying advanced energy project property

Code AT reports your share of the basis in qualifying advanced energy project property. These amounts are used to calculate the Qualifying Advanced Energy Project Credit under IRC §48C. To enter your share, go to: Federal > Deductions (Select my forms) > Credits > Investment Credit > Qualifying Advanced Energy Project Credit Under Section 48C > Unused Investment Credit from Cooperatives.

Code AU - Advanced manufacturing investment property

This code reports your share of the basis in advanced manufacturing investment property. These amounts are used to calculate the Advanced Manufacturing Investment Credit under IRC §48D. To report this information, go to: Federal > Deductions (Select my forms) > Credits > Investment Credit > Qualifying Advanced Energy Project Credit Under Section 48D > Unused Investment Credit from Cooperatives.

Code AV - Clean electricity investment property

This reports your share of the basis in clean electricity investment property. These amounts are used to calculate the Clean Electricity Investment Credit under IRC §48E, which applies to investments in facilities generating clean electricity. To enter, go to: Federal > Deductions (Select my forms) > Credits > Investment Credit > Clean Electricity Investment Credit Under Section 48E > Clean Electricity Investment Credit from Cooperatives.

Code AW - Reportable transactions (Not Supported)

This code indicates that the partnership participated in a reportable transaction under IRS disclosure rules. A reportable transaction is a transaction identified by the IRS as having the potential for tax avoidance or evasion. If the partnership is involved in such a transaction, you may also be required to disclose it. This information is reported on Form 8886, which we unfortunately do not support.

Code AX - Corporate Alternative Minimum Tax (CAMT)

This code provides information needed for a partner to determine its distributive share of the partnership’s Adjusted Financial Statement Income (AFSI) for purposes of the Corporate Alternative Minimum Tax (CAMT) under IRC §55. This information is reported on corporate returns and is not applicable to individual returns.

Code AY - Foreign Partners, Form 8990, Schedule A (Not Supported)

This code indicates that the partnership is providing information needed for foreign partners to complete Form 8990, Schedule A. TaxSlayer does not support Form 8990.

Codes AZ - BD

Reserved for future use

Code ZZ - Other

This code is used for any other information the partnership provides that is necessary for you to file your return but is not shown elsewhere on Schedule K-1. The entry point for the information depends on what is being reported using code ZZ.

Enter the amount to adjust from the Net Investment Income for this K-1

Use this field to make any adjustments necessary to the net investment income previously reported on this K-1. See these Form 8960 Instructions for further information.