How to suppress 59A(e) k-1 reporting in partnership module

[Kathi_at_Intuit · Accepted solution]

Great to see you in the community and thanks for reaching out! I was able to suppress the gross receipts for section 59A(e) by entering a -1 in screen 22>Other Schedule K Items>Other Information>Gross receipts for section 59A(e) [O]. 

Have a great day!

[bradw]

You're awesome Kathi!  Thanks for posting a concise resolution to this strange problem.

[Kathi_at_Intuit]

Welcome to the community and I am really glad that I was able to help! Have a great rest of your weekend.

[brent]

Hello,

I'm working in Lacerte 2020, partnership module right now.  Lacerte is generating a "Gross receipts per reg 1.59A-7(e)(2) - current year" statement on Sch K, Line 16r as well as a slew of foreign tax items on Line 16 of each K1.  The partnership owns a single rental property, has no foreign activity, and is not an applicable taxpayer for purposes of IRC §59A, nor are any of the partners.  How do I suppress all this 59A info?  I'm currently on Screen 22>Other Schedule K Items>Other Income and I do not see any input field for "Gross Receipts for section 59A(e)" as mentioned below.  I'm a long time, over 20 year Lacerte user, specializing in partnerships.  Please advise!

Thank you,

Brent Sweet CPA

[brent]

I found it at Screen 22>Other Schedule K Items>Foreign Transactions>"Gross Receipts per Reg 1.59A-2(e)(3)(i)" just below the middle of the Foreign Transactions section.  Please update this solution to reflect correct location of the input field.

Thank you,

Brent Sweet CPA

[brent]

I also found you have to go to Screen 32.1>Partner Miscellaneous Info>Gross Receipts per Regulations 1.59A-7(e)(2) [O] and enter "-1" in the 1st preceding tax year, 2nd preceding tax year, and 3rd preceding tax year fields in order to suppress this information on the K1s.  Again, our partnership and  all of our partners are not "Applicable Taxpayers" for purposes of IRC §59A.

Thank you,

Brent

[YurtCPA]

Hi Brent,

Nice to see a familiar name!   Had the same issue...my partnership and every other partnership I prepare is not anywhere close to $500 million in gross receipts.  There has to be a better way than to override Schedule K and K-1s, Lacerte should fix this right away.  Even if it's something similar to checking a box like the business interest limitations do not apply.  I almost didn't catch it because the Schedule K just has a "See Statement 1" with no amount but then my partner K-1s that were LLCs all had four lines under line 16 foreign transactions as AA AB AC and AD.  Don't know about your return but on mine, there was a proforma (black) number on Screen 32 Gross Receipts per Reg 1.59A...in the 1st preceding year gross receipts with the other preceding years blank.  However, on the K-1 there were four amounts, one for the allocable share of current gross receipts, 1st preceding, 2nd preceding and 3rd preceding year.  Evidently, Lacerte is pulling amounts from the Gross Receipts on Screen 5 - Other Information (Schedule B) but it should be very evident that the gross receipts are well under the $500 million threshold for §59A base erosion tax.   Darcia

[brent]

Hi Darcia,

Nice to see your reply!  With new K-1 rules, looks like the IRS is putting more focus on the numbers and trying to ferret out abusive transactions within partnerships.  Still, it seems odd that Lacerte would make §59A reporting automatic, when it likely does not apply to a great majority of users (thank goodness!).  Agreed, Lacerte, please add a "§59A Not Applicable" field!

Thank you,

Brent Sweet CPA     

[Naprawabookkeeping]

Is it a problem to have this number on the K1 if it is not applicable?

[brent]

If you don't mind it, I don't see it as an issue.  It depends on your client and tax information user base.  We prepare many real estate partnership returns and send K1s out to a lot of limited partner investors.  With all the tax code "simplification,"  partnership reporting is getting more and more complex.  There are more disclosures and notes appearing on the K1s, for §163J, §199, and now regarding tax basis adjustments.  There are always phone calls and questions every time new data appears on an investor's K1.  I don't need to create any more confusion by presenting "Foreign Transaction" numbers that are entirely unnecessary.  "What are all these foreign transaction numbers?  I though we owned a shopping center in San Bernardino!  What is going on?" Lacerte should provide a suppress option.  Have a great tax season!