Some Schedule K-1 (Form 1065) codes cannot be entered on the standard K-1 input screen and must instead be reported directly on a specific tax form. These are referred to as “unsupported” codes. In this guide, we’ll explain how to report both supported and unsupported Box 11 codes correctly. If a code is unsupported, you’ll need to manually enter the information on the appropriate tax form rather than through the K-1 entry screen.
Code A - Other portfolio income (loss)
Automatically carried to Schedule E starting tax year 2025
The partnership will report portfolio income other than interest, ordinary dividends, royalties, and capital gain (loss) income, and attach a statement to explain what kind of portfolio income you have. If the partnership held a REMIC residual interest, the statement may show:
- REMIC taxable income (net loss) → Report on Schedule E, line 38, column (d)
- Excess inclusion → Report on Schedule E, line 38, column (c)
- Section 212 expenses → Report on Schedule E, line 38, column (e)
Unsupported in years before 2025
To manually enter the code's information on a prior year return, please go to Federal > Income (Select my forms) > Less Common Income > Other Income > Choose Other Income from the dropdown, enter "Other Portfolio Income" for the description, and enter the code A amount.
Code B - Involuntary conversions
Unsupported in 2025 or prior years
This is your net gain (loss) from involuntary conversions due to casualty or theft. The partnership will give you a statement that shows the amounts to be reported on Form 4684, Casualties and Thefts, line 34.
To enter this within the program, please go into the Federal Section > Deductions (Select my forms) > Itemized Deductions > Less Common Deductions > Casualties and Losses. Please make sure you state this is business property, as it is directly related to your partnership.
Code C - Section 1256 contracts and straddles
Automatically carried to Form 6781 starting tax year 2025
The partnership will report any net gain or loss from section 1256 contracts. Report this amount on Form 6781, Gains and Losses From Section 1256 Contracts and Straddles.
Unsupported in years before 2025
To enter this code within the program for a prior year return, please access the return and go into the Federal Section > Income (Select my forms) > Less Common Income > Form 6781 - Gains and Losses From Section 1256.
Code D - Mining exploration costs recapture
Unsupported in 2025 or prior years
The partnership will provide you with a statement that outlines the necessary information to recapture certain mining exploration costs (Section 617).
To manually enter the code's information, please go to Federal > Income (Select my forms) > Less Common Income > Other Income > Choose Other Income from the dropdown, enter "Mining Exploration Costs Recapture" for the description, and enter the code D amount.
Code E - Cancellation of debt
Automatically carried to Schedule 1 starting tax year 2025
Generally, this cancellation of debt (COD) amount is included in your gross income (Form 1040, line 21). For your 2025 return, report your box 11 code E amount within the K-1 entry page.
Unsupported in years before 2025
To enter this code on a prior year return within the program, please access the return and go into the Federal Section > Income (Select my forms) > Less Common Income > 1099-C, 982 - Cancellation of Debt.
Under section *108(b)(5), you may elect to apply any portion of the COD amount excluded from gross income to the reduction of the basis of depreciable property. Enter this within the location mentioned above.
*Election under section 108(b)(5). Any member who realizes excluded COD income may make the election described in section 108(b)(5). The election is made separately for each member. Therefore, an election may be made for one member who realizes excluded COD income (either actually or pursuant to paragraph (a)(3) of this section). In contrast, another election, or no election, may be made for another member who realizes excluded COD income (either actually or pursuant to paragraph (a)(3) of this section). See §1.108-4 for rules relating to the procedure for making an election under section 108(b)(5). Source
Code F - Section 743(b) positive adjustments
Unsupported in 2025 or prior years
The partnership should use this code to report your share of income/gain that comes from your total net section 743(b) basis adjustments. This code will let you know if you should adjust your basis and by how much. This will not be reported on the 1040. To manually enter the code's information on a 2025 or prior year return, please go to Federal > Income (Select my forms) > Less Common Income > Other Income > Choose Other Income from the dropdown, enter "Section 743(b) positive income" for the description, and enter the code F amount.
Code H - Section 951(a) income inclusions
Unsupported in 2025 or prior years
Code H applies when a partnership is a U.S. shareholder of a foreign corporation and is required to report income under Subpart F rules. To manually enter the code's information on a 2025 or prior year return, please go to Federal > Income (Select my forms)> Less Common Income > Other Income > Choose Other Income from the dropdown, enter "Section 951(a) Income Inclusion" for the description, and enter the code H amount.
To manually enter the code's information on a 2025 or prior year return, please go to Federal > Income (Select my forms)> Less Common Income > Other Income > Choose Other Income from the dropdown, enter "Section 951(a) Income Inclusion" for the description, and enter the code H amount.
Code I - Gain (Loss) from Disposition of Mineral Properties
Unsupported in 2025 or prior years
Code I indicates a gain or loss from the disposition of oil, gas, geothermal, or other mineral properties under Section 59(e). The partnership should attach a statement that includes:
- Description of the property
- Your share of the amount realized
- Your share of the partnership’s adjusted basis (for non-oil/gas properties)
- Your share of intangible drilling, development, and mining exploration costs (Section 59(e) expenditures)
To manually enter the code's information on a 2025 or prior year return, please go to Federal > Income (Select my forms)> Less Common Income > Form 4797. You must calculate your gain or loss by increasing your adjusted basis by the capitalized Section 59(e) costs (i.e., costs you did not elect to deduct).
Code J - Recoveries of Tax Benefit Items
Unsupported in 2025 or prior years
A tax benefit item is an amount you deducted in a prior tax year that reduced your income tax. If you recover that amount in a later year, it must be included in income to the extent it reduced your tax in the prior year. To manually enter the code's information on a 2025 or prior year return, please go to Federal > Income (Select my forms) > Less Common Income > Other Income > Choose Other Income from the dropdown, enter "Recovery of Tax Benefit" for the description, and enter the code J amount.
Code K - Gambling Gains and Losses
Unsupported in 2025 or prior years
If the partnership was not engaged in the trade or business of gambling, enter your winnings and or losses by going to: Federal > Income (Select my forms) > Less Common Income > Other Compensation > Other Gambling Income not reported on W-2G.
If the partnership was engaged in the trade or business of gambling, enter your winnings and losses on Schedule E. To locate Schedule E, navigate to Federal > Income (Select my forms) > Profit or Loss from Rentals and Royalties
Code L - Section 751(b) Distributions
Unsupported in 2025 or prior years
These are certain distributions from a partnership that are treated as sales or exchanges of partnership interests, typically involving unrealized receivables or inventory items. To manually report the sale on Form 4797, go to: Federal > Income (Select my forms) > Less Common Income > Form 4797. Fill out the page and select Part II for the transaction type so it will carry over to Part II of Form 4797.
Code M - Section 1045 Rollover (replacement stock purchased by partnership)
Unsupported in 2025 or prior years
This applies to gains from the sale of Qualified Small Business (QSB) stock where the partnership elected to defer the gain under Section 1045 by purchasing replacement QSB stock. For tax years 2025 and prior, to manually report this information, go to Federal > Income (Select my forms) > Investments > Stocks, Mutual Funds, Cryptocurrency, Collectibles, etc. > Choose to enter your sale manually.
When reporting the sale, enter the following:
- Description - Section 1045 Rollover Gain
- Date Acquired/Sold - Use the dates provided by the partnership
- Sales Price and Cost - Enter your share as reported on the K-1 statement
- Adjustment code - Use code 'R' for Rollover of Gain from QSB Stock, then enter the postponed gain as a negative in the Adjustments box
Code N - Section 1045 Rollover (replacement stock not purchased by partnership)
Unsupported in 2025 or prior years
Code N represents gains eligible for Section 1045 rollover, but the partnership did not purchase replacement stock. To manually report this, go to Federal > Income (Select my forms) > Investments > Stocks, Mutual Funds, Cryptocurrency, Collectibles, etc. > Choose to enter your sale manually.
When reporting the sale, enter the following:
- Description - Section 1045 Rollover Election
- Date Acquired/Sold - Use the dates provided by the partnership
- Sales Price and Cost - Enter your share as reported on the K-1 statement
- Adjustment code - Use code 'R' for Rollover of Gain from QSB Stock, then enter the deferred gain as a negative in the Adjustments box
Code O - Section 1202 Exclusion
Unsupported in 2025 or prior years
Code O represents a gain from the sale or exchange of Qualified Small Business (QSB) stock that is eligible for Section 1202 exclusion. To manually report the exclusion, go to Federal > Income (Select my forms) > Investments > Stocks, Mutual Funds, Cryptocurrency, Collectibles, etc. > Choose to enter your sale manually.
When reporting the sale, enter the following:
- Description - Section 1202 Exclusion Gain
- Date Acquired/Sold - Use the dates provided by the partnership
- Sales Price and Cost - Enter your share as reported on the K-1 statement
- Adjustment code - Use code 'Q' for Exclude Part of the Gain from the Sale of Qualified Small Business Stock, then enter the gain as a negative amount in the Adjustments box to exclude it.
Code P - Gain or Loss on Disposition of Farm Recapture
Property and Other Items to which Section 1252 Applies
Unsupported in 2025 or prior years
These gains or losses arise when a partnership disposes of specific farm property that was previously subject to income recapture rules. To report the gain or loss, use Form 4797 by going to Federal > Income (Select my forms) > Less Common Income > Form 4797 > Fill out the page and select "Part III - Section 1252" for the Transaction Type so it will carry to Part III of Form 4797
You should receive from the partnership:
- Description of the farm recapture property
- Your share of the gain or loss
- Any supporting details relevant to Section 1252 treatment
Code Q - Gain or Loss on Fannie Mae or Freddie Mac Qualified Preferred Stock
Unsupported in 2025 or prior years
Code Q shows the gain or loss from the sale or exchange of qualified preferred stock of Fannie Mae or Freddie Mac. Non-financial institution partners report gains or losses from qualified preferred stock as capital transactions on Schedule D. To report the capital transaction on a Schedule D, go to Federal > Income (Select my forms) > Investments > Stocks, Mutual Funds, Cryptocurrency, Collectibles, etc.
If the partner is a financial institution under Section 582(c)(2) or a depositary institution holding company, you must report the sale using Form 4797. To locate Form 4797, go to Federal > Income (Select my forms) > Less Common Income > Form 4797
Code R - Specially Allocated Ordinary Gain (Loss)
Unsupported in 2025 or prior years
Code R shows a gain or loss that is specially allocated by the partnership and treated as ordinary income or loss. You report the gain or loss using Form 4797. To navigate to Form 4797, go to Federal > Income (Select my forms) > Less Common Income > Form 4797. Fill out the page and select "Part II - Property held less than 1 year" for the Transaction Type so that it will carry over to Part II of Form 4797.
Code S - Non-portfolio Capital Gain (Loss)
Unsupported in 2025 or prior years
Code S represents net short and long-term capital gains or losses from non-portfolio activities. This typically includes gains or losses from the disposition of non-depreciable personal property used in a trade or business activity of the partnership. To manually report this information, you must use Schedule D by going to Federal > Income (Select my forms) > Investments > Stocks, Mutual Funds, Cryptocurrency, Collectibles, etc. > Choose to enter your sale(s) manually.
Code ZZ - Other
Unsupported in 2025 or prior years
Code ZZ is essentially a catchall for any item that doesn't fall under the other categories. Please refer to the statement your partnership supplied to report code ZZ on your return.