56636

[#1]

Has anyone received an error ref 56636 concerning California PTE?

A California Passthrough Entity Elective Tax has been computed for some of the partners and a taxes deduction will need to be taken on the Federal return. As a result, the K-1s for all the partners will be getting a portion of this deduction reflected through ordinary income from trade/business or rental income. Please use the Federal K-1 special allocation input screen to allocate the deduction to the partners that elected to participate.

Solution: If only some of the partners are electing the CA PTET, the tax deduction on the federal return will be included on all partners' K-1s. To correct this so that only the participating partners get the deduction, a special allocation is needed so that only the participating members of the CA PTET will get the deduction on his/hers K-1s. This can be done in screen 29, Special Allocations.

Even though this diagnostic is critical, it will not prevent the e-filing of the return.

[OldCPA]

I'm getting this same diagnostic even though I've allocated EVERY income & expense item on both the federal & state special allocation sheets & the CA K1s are correct (the income items on the ordinary income on CA is higher than federal by each partners share of the PTET).

Why can't Lacerte fix these stupid diagnostics even after you do what it tells you to do.

But then I've found this to be a sloppy program.  I don't think they are doing any material investing in it anymore, they are trying to force everyone to go to their online version.

[sjrcpa]

If the return is correct and the Diagnostic doesn't prevent efiling, move on and file the return.