Some items reported on your Schedule K-1 (Form 1065) may need to be entered directly into a specific form instead of the K-1 entry screen. Below is a list of items that are not entered directly into Form 1065, Schedule K-1 within the program. Please find the specific item within Box 13 that is reported on your Form 1065.
Code C. Noncash contributions (50%)
If property other than cash is contributed, and if the claimed deductions for one item or group of similar items of property exceeds $5,000, the partnership must give you a copy of Form 8283, Noncash Charitable Contributions, to attach to your tax return. Do not deduct the amount shown on your Form 8283, as this is the partnership's contribution. Instead, you will deduct the amount identified within Code C, subject to the 50% AGI limitation.
Code D. Noncash contributions (30%)
Report this amount, subject to the 30% AGI limitation, on your Schedule A.
Code E. Capital gain property to a 50% organization
Report this amount, subject to the 30% AGI limitation, on line 12 of Schedule A.
To enter items with code C, D or E into the program, please go to the
- Federal Section
- Deductions
- Enter Myself
- Itemized Deductions
- Gifts to Charity
- Non-cash Donations (more than $500).
Code F. Capital gain property (20%)
Report this amount, subject to the 20% AGI limitation, on line 12 of Schedule A. The program does not support the option to add this to your individual tax return.
Code G. Contributions (100%)
The partnership will report your share of qualified conservation contributions of property used in agriculture or livestock production. This contribution is not included in the amount reported in box 13 using Code C. If you are a farmer or rancher, you qualify for a 100% AGI limitation for this contribution. Otherwise, your deduction is subject to 50% AGI limitation. This amount gets reported on line 12 of the Schedule A (Non-cash Donations).
The program does not support the option to add this to your individual tax return.
Code J. Section 59(e)(2) expenditures
On an attached statement, the partnership will show the type and the amount of qualified expenditures for which you may make a section 59(e) election. The statement will also identify the property for which the expenditures were paid or incurred. If there is more than one type of expenditure, the amount of each type will also be listed.
If you deduct these expenditures in full in the current year, they are treated as adjustments or tax preference items for purposes of alternative minimum tax. However, you may elect to amortize these expenditures over the number of years in the applicable period rather than deduct the full amount in the current year. If you make this election, these items are not treated as adjustments or tax preference items.
For more information on how to report your specific expenditure, please click here.
Code N. Educational Assistance benefits
Create a new line item for Schedule E line 28 to deduct up to the $5,250 limitation. If your benefits exceed the limitation, you can claim the remaining amount on form 8863.
Code P. Preproductive period expenses
You may be able to deduct these expenses currently or you may need to capitalize them under section 263A. See IRS Publication 225, Farmer's Tax Guide, and Regulations section 1.263A-4 for details.
Code Q. Commercial revitalization deduction from rental real estate activities
Follow the IRS Instructions for Form 8582 to figure how much of the deduction can be reported on your Schedule E, Line 28, column (f).
To enter this within the program, please go to the
- Federal Section
- Income
- Other Income
- K-1 Entries
- Schedule K-1 (Form 1065)
- Reduce your rental income or increase your rental loss by the amount of allowable deduction.
Code R. Pensions and IRAs
Payments made on your behalf to an IRA, qualified plan, simplified employee pension (SEP), or a SIMPLE IRA plan. You will enter this as an IRA deduction within your tax return. Enter payments made to a qualified plan, SEP or SIMPLE IRA plan on Form 1040, line 28. If the payments to a qualified plan were to a defined benefit plan, the partnership should give you a statement showing the amount of the benefit accrued for the current tax year.
To enter this within the program, please go to the
- Federal Section
- Deductions
- Enter Myself
- Adjustments
- Contributions to SEP, SIMPLE, and Qualified Plans.
Code S. Reforestation expense deduction
The partnership will provide a statement that describes the qualified timber property for these reforestation expenses. The expense deduction is limited to $10,000 ($5,000 if married filing separately) for each qualified timber property, including your share of the partnership's expense and any reforestation expenses you separately paid or incurred during the tax year.
Use IRS Form 8582 to figure the amount to report on your Schedule E, Line 28.
To enter this within the program, please go to the
- Federal Section
- Income
- Other Income
- K-1 Entries
- Schedule K-1 (Form 1065)
- Reduce your income or increase your loss by the amount of allowable deduction.
NOTE: If you materially participated in the reforestation activity, report the deduction as is.
Code T an U Reserved for future use.
Code V. Section 743(b) negative adjustments
The partnership should use this code to report your share of deductions/losses that come 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.
Code W. Other Deductions
The partnership will give you a description and the amount of your share for each of these items. For more information on how to report this information, please visit the IRS Form 1065, Schedule K-1 Partnership Instructions.
Source: IRS Form 1065, Schedule K-1 Partnership Instructions