56632
California Passthrough Entity Elective Tax has been computed on some of the shareholders and will need to be taken as a deduction on the Federal return. As a result, the K-1s for all the shareholders will be getting a portion of this deduction reflected through ordinary income or rental income. Please use the Federal K-1 overrides input screen and override both the Federal and state income amounts. These will be required entries to allocate the deduction to only the shareholders that elected to participate.
Solution: If all of the shareholders are electing the CA PTE, there is nothing needed to be done. If only some of the shareholders are electing CA PTE, then overrides will be necessary to remove the deduction from those K-1s not electing CA PTE. This can be done using screen 33, Schedule K-1 Overrides and making an entry in Ordinary business income (loss) for the non-participating members.
