Where do I enter my 1065 deductions?
You should report Box 14, 15, 17, 18, and 20 information from your Schedule K-1 Form 1065 under the
- Federal Section
- Income -Select My Forms
- Less Common Income
- K-1 Earnings
- Schedule K-1 Form 1065
This section of the program contains information for Part III of the Schedule K-1 1065. Please be aware that the program does not allow for direct entries for all Box 14-20 information. You can review this article for any Box 20 codes that are not included in the Schedule K-1 entry.
Box 14 Self Employment Earnings (Losses)
Code A Net Earnings or Loss from Self Employment Income- If there is a positive amount reported to you in this box, please report the amount as it is reported to you. This will be reduced appropriately by the program by any section 179 deduction you previously reported. If there is a loss reported to you, please report the deductible amount as a negative in this field. You can review the loss limitations here.
Code B Gross Farm Income (or Fishing)- Report the amount of income as it is reported to you in Box 14 Code B of your form. This income will pull to the Schedule E automatically. However if you elect to use the optional farm method to calculate self employment tax, you will need to make a manual entry under the Federal Section > Other Taxes > Self Employment Tax Schedule SE. You can review this optional farm method information in these Schedule SE instructions.
Code C Gross Non-Farm Income- Report the amount as it is reported to you in Box 14 Code C. This amount will be included in the self employment income total and used to calculate self employment tax appropriately. If you wish to elect to use the optional non-farm method, you will need to make a manual entry under the Federal Section > Other Taxes > Self Employment Tax Schedule SE. You can review this optional non-farm method information in these Schedule SE instructions.
Box 15 Credits
Code O Back up Withholding- Report the amount as it is reported to you in Box 15 Code O. This is a taxpayer's share of the Credit for Backup Withholdings on dividends, interest, and other types of income. It will pull to the 1040 form appropriately with a statement for the partnership and entity information.
There are other Box 15 Codes that TaxSlayer does not currently support direct entries in this section. If you have another Box 15 Code, please review these Partnership instructions and you can contact us for further information regarding that specific credit.
Box 16 Foreign Transactions- These transactions cannot be directly reported with in this section of the program. The amounts may effect any Foreign Tax Credit Form 1116 entries you make in the Federal Section > Deductions > Credits > Foreign Tax Credit Form 1116 section, but please review these Partnership Instructions and Foreign Tax Credit Form 1116 Instructions prior to making entries for that credit.
Box 17 Alternative Minimum Tax Items
Code A Post 1986 depreciation adjustment- Report this amount as it is reported to you on your form Box 17 Code A. This amount will pull to the depreciation Form 6251 appropriately.
Code B Adjusted Gain or Loss- Report the amount as it is reported to you with Box 17 Code B. This adjusted gain or loss will appropriately pull to the depreciation Form 6251.
Code C Depletion (other than gain and oil)- Report the amount as it is reported to you so that this depletion adjustment will be reported on the Form 6251.
Other Box 17 codes are not currently supported as direct entries in TaxSlayer at this time. You can review the code information in these Partnership Instructions and contact us for further information with your specific code and amount.
Box 18 Tax Exempt Income and Nondeductible Expenses
Code A Tax Exempt Interest Income- Report the amount of tax exempt interest as it is reported to you in Code A. This will accurately pull to the 1040 Line 2a.
Box 18 codes B and C are not reported on the 1040 form so they are currently not included as program entries.
Box 19 Distributions made to you, the partner or member, during the year
Box 19 Distributions are not reported directly with in the program because these codes generally are not reported on your return, but effect your overall basis in the partnership.
Code A Cash & Marketable Securities - This is the cash and marketable securities distributed to the taxpayer by the partnership. These items reduce the basis that the taxpayer has in the partnership so please be sure you adjust your basis appropriately in your records.
Code B Distributions subject to section 737 - This is the amount of Section 737 property which is property that was contributed to the partnership by another partner. This should adjust your basis in the partnership for your records. In addition to a basis reduction there may be a requirement to recognize a gain on any distribution of property designated as section 737 property. Please see the partner's instructions provided by the partnership or contact the issuer directly for further information on the treatment of this distribution.
Code C Other Property - This amount includes any property distributed to the taxpayer that is not cash, marketable securities or property that was contributed to the partnership by another partner. These items reduce the basis that the taxpayer has in the partnership and are not reported on the tax return directly. See the partner's instructions provided by the partnership for further information on the type of property distributed and the treatment of this distribution.
Box 20 Other Information
Code A Investment Income- This amount is the taxpayer's share of investment income (interest, dividends, etc.) from the partnership. This income should have been reported elsewhere on this K-1 in the Income items. The amount in Box 20, code A is provided for informational reasons only and will not pull to any other form which is why the program does not include the field entry.
Code B Investment Expenses- Report the amount as it is reported to you in Box 20 code B. Please be aware that if you have investment expenses to claim, you should report them under the Federal Section, Deductions, Itemized Deductions, Less Common Deductions, Investment Interest.
Code Z Section 199A Income- Report the amount as it is reported to you with this code. This amount is Qualified Business Income that allows for the calculation of the Qualified Business Income Deduction (QBID Form 8995).
Please check the box following this field if the business is a specified service trade or business. A specified service business is a trade or business involving the performance of services in the fields of health, law, accounting, insurance/risk assessment, performing arts, consulting, athletics, financial services, investing and investment management, trading, etc. You can review more information regarding this definition and the deduction in this IRS article.
In the fields below, please report the amounts as they are reported on your copy of your K-1 for all of the types of Section 199A income. These fields will determine the calculation for your correct Qualified Business Income Deduction.
Code AE Excess Taxable Income- Report this amount as it is reported to you on your K-1. This is the amount of excess taxable income determined by the partnership for the purpose of the limitation of the partnership’s ability to deduct business interest.
Code AF Excess Business Interest Income- Report the amount as it is reported to you on your copy of your K-1. This is the business interest that was subject to a business interest limitation at the partnership level.
Code AG Gross Receipts for Section 59(A)e- Report the amount as it is reported to you on your K-1. This is the partner's share of gross receipts under section 59A which is used to determine the tax on base erosion payments for corporate taxpayers. This tax is calculated by corporations on Form 8991 and reported on Form 1120, Schedule J.
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.