Utah partnership income apportionment

[willatbird]

Multi-state partnership return. Based in California but apportioning income to Utah (and 4 other states). Schedule J - Apportionment Schedule is picking up the numbers correctly and calculating an apportionment percentage of  .323675 on page 2.  Schedule A is applying that fraction correctly and coming up with a total Utah income to allocate based on that percentage (say $800,000).  HOWEVER, the Schedule K, Utah Amount column is showing at 83.93% of the Federal numbers, or closer to $2.13 million. I was on the phone with Lacerte tech support and they were unable to help me. Has anyone else at all run into this? It's especially weird to me because A and J are correct, but K is so very far off. 

Unfortunately, when I discovered this, I went back to 2019 and found that the same problem occurred. I haven't been able to bring myself to look at 2018 yet.

[PhoebeRoberts]

The UT partnership Sch K and the analogous K-1s look weird enough that I routinely memo "Your net UT source income, after rounding adjustments, is $X" on my K-1s. That said, I don't think I've ever seen the problem you're having - Line 15 of Sch A matches both the sum of column E on Schedule N and the net of the UT column of Sch K (to within a few dollars, because rounding).

Mine apportions to 6 states and allocates to one, but there's probably no overlap other than UT between yours and mine. Mine is oil & gas, but the industry-specific Utah weirdnesses affect the apportionment percentage, not the calculations based on it.

If you look at your Override Diagnostics (a page on the Forms tab), are any of them relevant? They don't necessarily pick up all the items that can change a calculation significantly, but sometimes I find stuff there. I assume there are no relevant items on the Diagnostics tab.

[willatbird]

Thanks for your considered response. 

The only override diagnostic was from the "Automatic Apportionment" checkbox.  Unfortunately, the only change provided by that box is if I put a 2 (no automatic apportionment) the amount in the Utah column is the same as the Federal column.

Now I'm wondering if it's because I have one resident partner, one part-year resident of Utah, and two non-resident partners. (The two non-residents have claimed the waiver as they have other Utah income). Would that make a difference because the residents need to pay tax on their entire income? That's how California would work (but there's a source income column on the K-1).

Back to the instruction booklet.

[PhoebeRoberts]

Yes, I think that the varying partner residencies may account for the weird presentation. All of mine are non-resident, with mineral withholding in excess of the Sch N calculation.

[willatbird · Accepted solution]

Sometimes you just have to sleep on it. I prepared an excel schedule with all the varying percentages and residencies, and if you consider the part year resident a full year resident, the Utah amount agrees to their calculation (with rounding). I'm so very glad I didn't just override and go forward with it.

Thanks for thinking this through with me!