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Partner made elective deferrals into the 401(k) Plan from his guaranteed payments. How do you enter this in Lacerte

rliptzin
Level 1

The partners receives guaranteed payments and makes elective deferrals into the 401(k) plan. What is the best way to enter this in Lacerte

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4 Comments 4
George4Tacks
Level 15
rliptzin
Level 1

I am preparing the K-1 and the Form 1065. In Screen 22 under other deductions I enter Code R for the retirement contribution that the partners withheld from their guaranteed payments they made. The guaranteed payments listed on the K-1 includes the elective deferral. Then in screen 27.1 - Deduction on Schedule K not charged against book income I enter it again. If I do not do that my net income per books on Schedule M-1 line 1 does not agree. My problem is that on Schedule M-2 line 3 the net income per books (as adjusted to tax basis) is understated. And as a result the Partnership's capital account balance line 9 is also understated. In order to fix this I entered the elective deferrals in line 4 as other increase but it is not way I want to prepare this tax return. There is no mechanism for me to add back the elective deferral on Line 3 of Schedule M-2. So I thought perhaps there is a different wat to enter the elective deferral. 

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Jimmy4
Level 2

I am having the same problem in proseries.  why is this so difficult?  In the past I would M-1 it, but the schedule M-2 net income is off by the contribution amount? What am I missing here?

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edavis008
Level 1

I have the same problem. Someone please enlighten us!

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