How do I Report Schedule K-1 (Form 1065) Box 13 Information?

Box 13 reports “Other Deductions” that fall outside standard categories such as ordinary business income, interest, or guaranteed payments. These deductions generally relate to specialized tax benefits or adjustments that partners must claim individually. Because they often involve unique reporting requirements, most items in Box 13 require special handling on the partner’s return, including the use of additional forms or schedules.

The program provides two methods for entering Schedule K-1 information:

Direct Entry via the K-1 Section
Navigate to the K-1 section of the program and enter all required details directly.
Entry Through the Associated Form
Go to the specific form where the K-1 information is reported (e.g., Form 1040 Schedule E, Schedule D, etc.) and make the necessary entries there.

Below are the guidelines for reporting these items:

Direct entry into the K-1:

You should report Box 13 information from your Schedule K-1 Form 1065 under the

Federal
Income -Select my forms
Less Common Income
K-1 Earnings
Schedule K-1 Form 1065
Other Deductions

Box 13 has many codes, not all of which are direct entries or supported by the TaxSlayer program. Below are the Box 13 codes for which the program currently contains direct entries:

Code A - Cash Contributions 60%

Report the amount as it is reported to you on your Box 13 Code A. This amount will automatically pull to Schedule A, subject to the 60% AGI limitation on such contributions. Before the passage of the Tax Cuts and Jobs Act, this deduction was subject to a 50% AGI limitation, not 60%.

Code B - Cash Contributions 30%

Report the amount as it is reported to you on your Box 13 Code B. This amount will automatically be pulled to Schedule A (Form 1040), subject to the 30% AGI limitation on such contributions.

Any contributions reported in Box 13, Codes A and B, may affect the Qualified Business Income (Loss) coming from the partnership. If you have Itemized Deductions on Schedule A, the entire amount of the Charitable Gifts claimed on Schedule A that were from the partnership will reduce the QBI coming from that partnership. The charitable contributions entered in the tax program on Line 13, Codes A and B, which are allowed contributions on Schedule A - Itemized Deductions, will carry over to Schedule A and automatically reduce the Qualified Business Income from that partnership. Therefore, it will affect any allowable Qualified Business Income Deduction appropriately.

Code G - Cash 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.

Code H - Investment interest expense

Report the amount as it is reported to you in Box 13 Code H. This amount will be allocated to Form 4952 - Investment Interest Expense Deduction accordingly.

Code I - Deductions—royalty income

Report the amount as it is reported to you in Box 13, Code I. This represents a taxpayer's share of deductions allocable to royalties and will be automatically transferred to Schedule E, line 19.

Code K - Excess business interest expense

Report the amount as it is reported to you in Box 13 code K. This interest could be subject to a limitation. However, most small business taxpayers (defined as those with average annual gross receipts of $25 million or less for the previous three years) are not subject to these limitations and do not file Form 8990 to claim a limitation.

Code L - Deductions Portfolio (Other)

Report the amount as it is reported to you in Box 13 code L. This represents a taxpayer's share of portfolio deductions that are not subject to the 2% income limitation as a Miscellaneous Deduction on Schedule A. This amount will automatically carry over to the itemized deductions on Schedule A, line 16, with a description indicating that it originated from this partnership or entity.

Code M - Amounts Paid for Medical Insurance

Report the amount listed in Box 13, Code M. This represents the amounts paid during the tax year for insurance that constitutes medical care for the taxpayer, spouse, and dependents. This amount will be automatically allocated to the itemized deductions Schedule A, medical expenses, or SE health insurance adjustment, based on your entry.

Code N - Educational Assistance benefits

Create a new line item for Schedule E line 28 by adding a new K-1 entry to deduct up to the $5,250 limitation. If your benefits exceed the limitation, you can claim the remaining amount on Form 8863.

Code O - Dependent Care Benefits

Report the amount as it is reported to you in Box 13, Code O. This is the amount of dependent care paid by the partnership. This will be pulled to the employer-paid benefits line of Form 2441 appropriately if you complete the rest of the credit information under the Federal Section > Deductions > Credits, specifically the Child Care Credit Form 2441.

Entry Through the Associated Form

Some items reported on your Schedule K-1 (Form 1065) may need to be entered directly into a specific form, rather than the K-1 entry screen. Below is a list of items that do not automatically transfer from the K-1 to the correct form. You will need to manually enter these items:

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 exceed $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. To report noncash charitable contributions, go to Federal > Deductions (Select my forms) > Itemized Deductions > Donations to Charity > Noncash Donations. After completing the Noncash Donations section, report the donation amount again under Prior-Year Carryover and Donation Limits > Other donations to any qualified organization.

Code D - Noncash contributions (30%)

Report this amount, subject to the 30% AGI limitation, on your Schedule A. To report, go to Federal > Deductions (Select my forms) > Itemized Deductions > Donations to Charity > Noncash Donations. After completing the Noncash Donations section, report the donation amount again under Prior-Year Carryover and Donation Limits > Non-capital gain property gifts to non-50% limit organizations.

Code E - Capital gain property to a 50% organization

Report this amount, subject to the 30% AGI limitation, by going to Federal > Deductions (Select my forms) > Itemized Deductions > Donations to Charity > Noncash Donations. After completing the Noncash Donations section, report the donation amount again under Prior-Year Carryover and Donation Limits > Capital gain property gifts to 50% limit organizations.

Code F - Capital gain property (20%)

Report this amount, subject to the 20% AGI limitation, by going to Federal > Deductions (Select my forms) > Itemized Deductions > Donations to Charity > Noncash Donations. After completing the Noncash Donations section, report the donation amount again under Prior-Year Carryover and Donation Limits > Gifts of capital gain property to non-50% limit organizations.

Code G - Noncash Contributions (100%)

The partnership will report your share of qualified conservation contributions of property used in agriculture or livestock production. 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. To report this amount, go to Federal > Deductions (Select my forms) > Itemized Deductions > Donations to Charity > Noncash Donations. After completing the Noncash Donations section, report the donation amount again under Prior-Year Carryover and Donation Limits > Donations to conservation causes (100% of AGI) OR Other conservation donations (Not 100% of AGI).

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 expenses 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 the 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.

To elect amortization, go to: Federal > Income (Select my forms) > Profit or Loss from Rentals and Royalties > Add a Schedule E > Depreciation.

To take the full deduction, go to: Federal > Income (Select my forms) > Profit or Loss from Rentals and Royalties > Add a Schedule E > Expenses > Additional Expenses > Provide a description and the full expenditure amount.

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. If you can deduct the expenses, report them on Schedule F by going to: Federal > Income (Select my forms) > Profit or Loss from Farming > Other Expenses > Enter the amount from box 13 code P and add a description referring to your Schedule K-1 Form 1065.

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 on your tax return. Enter payments made to a qualified plan, SEP, or SIMPLE IRA plan on Schedule 1 Line 16. 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:

Federal
Deductions - Select my forms
Adjustments to Income
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. To report this information using our software, it gets entered on a Schedule E. To complete the Schedule E, go to: Federal > Income (Select my forms) > Profit or Loss from Rentals and Royalties.