To determine your QBI items allocable to qualified payments, see the Instructions for Form 8995-A. To report Schedule K-1, Box 13, code W without having descriptions or instructions about the deductions: Go to Screen 20, Passthrough K-1's. Select Partnership Infomation from the left menu. Reduce the basis of your stock (as explained earlier) by distributions, not reported on Form 1099-DIV, of property or money. You will use one of these two forms to figure your QBI deduction. Why is that? If you didn't materially participate in the activity, use Form 8582 to determine the amount that can be reported on Schedule E (Form 1040), line 28, column (f). Report passive income (losses), deductions, and credits as follows. Report this amount on line 3 of Form 5884, Work Opportunity Credit, or Form 3800, Part III, line 4b (see TIP , earlier). "contactType" : "customer service", Mark as New; Bookmark; Subscribe; The corporation must report such amounts totaling $10 or more for the calendar year on Form 1099-DIV, Dividends and Distributions. You are responsible for keeping the information needed to figure the basis of your stock in the corporation. Report this amount on Schedule 1 (Form 1040), line 18. Applying the Deduction Limits, Interest expense allocated to debt-financed distributions. The corporation will provide all the following information. 535 for details. 68-537, 1968-2 C.B. If the corporation made a contribution of real property located in a registered historic district, it will report any information you will need to take a deduction. Don't file it with your tax return unless backup withholding is reported in box 13 using code O. Generally, you must increase the basis of your stock by the amount shown, but don't include it in income on your tax return. When modified adjusted gross income is $150,000 or more ($75,000 or more if married filing separately), there is no special allowance. You have no prior year unallowed losses from these activities. This is your share of the credit for backup withholding on dividends, interest income, and other types of income. Employer credit for paid family and medical leave (Form 8994). See Form 461, Limitation on Business Losses, and its instructions for more information. All others, report the credit on line 1c. Film, television, and live theatrical production expenses. See Limitations on Losses, Deductions, and Credits, earlier. Your total loss from the rental real estate activities wasn't more than $25,000 (not more than $12,500 if married filing separately). Line: Code: K-1 Description: Activity Type: Flows To: 13 D Noncash contributions (30% AGI limitation) Sch A, line 12 or, if the total of all noncash contributions is greater than $500, Form 8283 E Capital gain property (30% AGI limitation) Sch A, line 12 or, if the total of all noncash contributions is greater than $500, Form 8283 However, when applicable, all shareholders must complete and attach the following credit forms to their return. Report this amount on Schedule 1 (Form 1040), Additional Income and Adjustments to Income, line 8o, or the comparable line of your income tax return, as an addition to any amount of global intangible low-taxed income (GILTI) under section 951A otherwise computed on Form 8992, U.S. You must have held an interest in the corporation when the corporation acquired the QSB stock and at all times thereafter until the corporation disposed of the QSB stock. Report this amount, subject to your applicable limitation, on Schedule A (Form 1040), line 12. Code H. Undistributed capital gains credit. Page 11, under Code P. Other Credits. Activities that meet the definition of rental activities under Temporary Regulations section 1.469-1T(e)(3) and Regulations section 1.469-1(e)(3). Carbon oxide sequestration credit (Form 8933). In addition, you must complete Schedule D (Form 8995-A), Special Rules for Patrons of Agricultural or Horticultural Cooperatives, to determine your patron reduction. More Than One Activity for At-Risk Purposes, Box 19. These credits may be limited by the passive activity limitations. The corporation should also give you (a) the name of the corporation that issued the qualified small business (QSB) stock, (b) your share of the corporation's adjusted basis and sales price of the QSB stock, and (c) the dates the QSB stock was bought and sold. The corporation will use code AD to report the following to shareholders. New clean renewable energy bond credit. The deductions are limited by section 190(c) to $15,000 per year from all sources. Renewable electricity production credit (Form 8835). Box 13, code S reports reforestation expense deduction. If you make this election, these items aren't treated as adjustments or tax preference items. For K-1 codes without input in the K-1 input screen: These amounts may require additional computations before being entered in theSeparately Stated Income and Deductionssection. Report this amount on Form 8912. The program carries the deduction to Miscellaneous Deductions Subject to 2% AGI Limitation on Schedule A. If the treatment on your original or amended return is inconsistent with the corporation's treatment, or if the corporation hasn't filed a return, file Form 8082, Notice of Inconsistent Treatment or Administrative Adjustment Request (AAR), with your original or amended return to identify and explain any inconsistency (or to note that a corporate return hasn't been filed). 559, Survivors, Executors, and Administrators. Qualified dividends are excluded from investment income, but you may elect to include part or all of these amounts in investment income. The corporation will report your share of gain or loss on the sale, exchange, or other disposition of property for which a section 179 expense deduction was passed through to shareholders with code K. If the corporation passed through a section 179 expense deduction for the property, you must report the gain or loss, if any, and any recapture of the section 179 expense deduction for the property on your income tax return (see the Instructions for Form 4797 for details). The basis of your loans to the corporation is generally the balance the corporation owes you, adjusted for any reductions and restorations of loan basis (see the instructions for box 16, code E). Any rental real estate loss allowed under section 469(c)(7) to real estate professionals (defined earlier). To qualify for the section 1045 rollover: You must have held an interest in the corporation during the entire period in which the corporation held the QSB stock (more than 6 months prior to the sale), Your share of the gain eligible for the section 1045 rollover can't exceed the amount that would have been allocated to you based on your interest in the corporation at the time the QSB stock was acquired, and. After completing the steps for Section 754 detailed in either of the articles listed above, the deduction will be reported on Schedule K-1 as follows: The deduction will carry to Schedule K-1, line 13 with code W, if neither of the above options are marked. Box 13 is used to report many different items, so select on the codes below to view the instructions on entering them. The corporation should give you a description and the amount of your share for each of these items. Thank you. You should generally use Form 7203, S Corporation Shareholder Stock and Debt Basis Limitations, to figure your aggregate stock and debt basis. See Special allowance for a rental real estate activity , earlier. See Limitations on Losses, Deductions, and Credits, earlier. See Pub. Most credits identified by code P will be reported on Form 3800, Part III (see TIP , earlier). Code I. Look-back interestCompleted long-term contracts. If you are married filing jointly, either you or your spouse must separately meet both (a) and (b) of the above conditions, without taking into account services performed by the other spouse. This penalty is in addition to any tax that results from making your amount or treatment of the item consistent with that shown on the corporation's return. In general, shareholders whose only sources for a credit listed on Form 3800, General Business Credit, Part III, are partnerships, S corporations, estates, trusts, and cooperatives, aren't required to complete the applicable credit form or attach it to their return. These losses and deductions include a loss on the disposition of assets and the section 179 expense deduction. Activities of trading personal property for the account of owners of interests in the activities. Don't change any items on your copy of Schedule K-1. Code K. Dispositions of property with section 179 deductions. Net Long-Term Capital Gain (Loss), Box 15. Enhanced oil recovery credit (Form 8830). If the corporation cooperated with an international boycott, it must give you a copy of its Form 5713. See section 7874 for details. The corporation will report any self-charged interest income or expense that resulted from loans between you and the corporation (or between the corporation and another S corporation or partnership if both entities have the same owners with the same proportional interest in each entity). The maximum special allowance that single individuals and married individuals filing a joint return can qualify for is $25,000. See Regulations sections 1.1411-1 through 1.1411-10 for more details. Report this amount on line 5 of Form 8846, Credit for Employer Social Security and Medicare Taxes Paid on Certain Employee Tips, or Form 3800, Part III, line 4f (see TIP , earlier). You have been successfully added to the TaxAct Do Not Sell list. If the proceeds were used in an investment activity, report the interest on Form 4952. The corporation will report any information you need relating to interest you are required to capitalize under section 263A for production expenditures. "https://www.instagram.com/taxact", The manner in which you report such interest expense depends on your use of the distributed debt proceeds. I have a 2015 K-1 with two Box 13, Code W entries. Generally, code WA -- Interest expense allocated to debt-financed distributions-- flows to the Wks K1P Detail Adj Basis, line 10k, then to Schedule E, page 2, line 28. UltraTax CS reports this information on Schedule K-1, box 13, code W. The following information, as listed in the Form 1065 instructions for Schedule K, line 13d, must be provided for the partner to calculate the domestic production activities deduction. Report this amount on line 3 of Form 6478, Biofuel Producer Credit, or Form 3800, Part III, line 4c (see TIP , earlier). If the S corporation checked the box, see the attached Schedule K-3 with respect to items of international tax relevance. The partnership will provide a statement describing the qualified timber property for these reforestation expenses. This is your net loss from involuntary conversions due to casualty or theft. Code N reports educational assistance benefits. The amount of loss and deduction you may claim on your tax return may be less than the amount reported on Schedule K-1. You may be able to deduct these expenses currently or you may need to capitalize them under section 263A. See Limitations on Losses, Deductions, and Credits, earlier. Code E. Qualified rehabilitation expenditures (rental real estate). Any overall loss from a publicly traded partnership. Once an election is made under section 754, it applies both to all distributions and to all transfers made during the tax year and in all subsequent tax years unless the election is revoked. @DaveF1006- thanks. Employee retention credit for employers affected by qualified disasters (Form 5884-A). Generally, the expense deduction is limited to $10,000 ($5,000 if married filing separately) for each qualified timber property, including your distributive share of the partnership's expense and any reforestation expenses you separately paid or incurred during the year. 304, and Rev. See section 453A(c) for details on how to figure the interest. Use the information in the attached statement to correctly determine your passive activity limitations. Schedule K-1 provides information to help you figure your stock basis at the end of each corporate tax year. The corporation will identify by code E your share of any recapture of a low-income housing credit from its investment in partnerships to which the provisions of section 42(j)(5) apply. Modified adjusted gross income is your adjusted gross income figured without taking into account the following amounts, if applicable. A K-1 for a partnership Box 13 code W. If those expenses are portfolio expenses/ management fees, are those considered Ask an Expert Tax Questions A K-1 for a partnership Box 13 code W. If those expenses are Carter McBride, Certified Public Accountant (CPA) Tax 11,189 Verified Carter McBride, Certified Public. 11,189 Satisfied Customers Generally, the expense deduction is limited to $10,000 ($5,000 if married filing separately) for each qualified timber property, including your distributive share of the partnerships expense and any reforestation expenses you separately paid or incurred during the tax year. If income is reported in box 1, report the income on Schedule E (Form 1040), line 28, column (h). See Limitations on Losses, Deductions, and Credits, earlier. For example, if the corporation's tax year ends in February 2023, report the amounts on your 2023 tax return. Ask, or enter a search term below. These deductions aren't taken into account in figuring your passive activity loss for the year. Educational assistance benefits. Since this is related to a portfolio investment, it may be related to investment expenses that can be claimed as a miscellaneous itemized deduction. Report this amount, subject to the 60% AGI limitation, on Schedule A (Form 1040), line 11. If you are filing a 2022 Form 1040 or 1040-SR, use the following instructions to determine where to report a box 2 amount after applying the basis and at-risk limitations on losses. If the corporation participates in a transaction that must be disclosed on Form 8886, Reportable Transaction Disclosure Statement, both you and the corporation may be required to file Form 8886 for the transaction. Code L You may be eligible to elect to deduct these expenses currently or capitalize them under section 263A. You will need to determine the amount of the ordinary dividends that are attributable to PTEP in your annual PTEP accounts. Gross receipts for section 448(c). See Limitations on Losses, Deductions, and Credits, earlier. If it reports the other two types of unrecaptured gain, it will provide an attached statement that shows the amount for each type of unrecaptured section 1250 gain. You arent a patron in a specified agricultural or horticultural cooperative. The corporation will report your share of any recapture of section 179 expense deduction if business use of any property for which the section 179 expense deduction was passed through to shareholders dropped to 50% or less before the end of the recapture period. However, work in connection with the activity isn't counted toward material participation if either of the following applies. Rul. If you don't make the election, report the section 59(e)(2) expenditures on Schedule E (Form 1040), line 28, and figure the resulting adjustment or tax preference item (see Form 6251, Alternative Minimum TaxIndividuals). Report any qualified dividends on Form 1040 or 1040-SR, line 3a. The amortization periods begin with the month in which such costs were paid or incurred. The activity was a personal service activity and you materially participated in the activity for any 3 tax years (whether or not consecutive) preceding the tax year. Both are labeled "Section 754 Basis Adjustment" from two of the properties within the partnership. If the corporation has deductions attributable to a business activity, it will provide a statement showing the aggregate gross income or gain and the aggregate deductions from the business activity that you need to figure any excess business loss limitation. For treatment of S corporation income upon the death of a shareholder, see Pub. If the line item represents miscellaneous itemized deductions (which is likely), those deductions were eliminated by tax reform (the TCJA) and will not appear anywhere. Income, and live theatrical production expenses a 2015 K-1 with two 13. 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