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

The partnership will give you a statement that shows charitable contributions subject to the different AGI limitations. Below you will find instructions on how to report these items in our program. 

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. Prior to the passage of the Tax Cuts and Jobs Act this deduction was subject to a 50% AGI limitation and 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 pull 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 the Schedule A that were from the partnership, will reduce the QBI coming from that partnership. The charitable contributions entered in the tax program on the following Line 13, Codes A and B that are allowed contribution on Schedule A - Itemized Deductions will carry to the Schedule A and will automatically reduce the Qualified Business Income from that partnership. Therefore, will affect any allowable Qualified Business Income Deduction appropriately. 

Code H - Investment interest expense

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

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 automatically pull 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 (which are defined as taxpayers 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 for 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 to the itemized deductions Schedule A, line 16 with a description that it came 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, dependents. This amount will be automatically pulled to the itemized deductions Schedule A medical expenses. 

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 pull 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, Child Care Credit Form 2441. 

Code X - Section 965(c) deduction

Report the amount is it is reported to you in Box 12, Code K. This amount is a taxpayer's share of section 965(a) deductions.

Direct entry into forms:

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. 

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

1. Federal 
2. Deductions - Select my forms
3. Itemized Deductions
4. Gifts to Charity
5. 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.

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). 

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 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 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 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:

1. Federal 
2. Deductions - Select my forms
3. Adjustments to Income
4. 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:

1. Federal 
2. Income - Select my forms
3. Less Common Income 
4. K-1 Entries
5. Schedule K-1 (Form 1065) 
6. Create a new K-1
7. 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.

See instructions for reporting information:

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-4for details.

Codes Q, T, U and X - Reserved

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.

Source: IRS Form 1065, Schedule K-1 Partnership Instructions