Schedule E- Line 23 totals cannot be negative

[AtlasDaniel]

Hello-

Critical diagnostic on return: For e-file purposes, the total of all amounts on lines 23a, 23b, 23c, 23d or 23e cannot be negative. Paper return must be filed.

2019 Tax Year reported virtually the same numbers as 2020 (including a negative amount in 23b, Royalties) and e-file was allowed. For 2020, I am not allowed to efile. K-1s for a pair of partnerships have generated a small loss on royalties (Box 7, F1065 K-1). Do I ignore what the K-1 says and book the royalty income somewhere else?

Anybody know a work around for this? I don't want to paper file the return because of the size...

[PhoebeRoberts · Accepted solution]

Normally the partnership would report gross royalty income in Box 7 and royalty deductions in Box 13, Code I. Do you control the partnership return? If so, you could correct the presentation there. If not, move the negative amount to Box 13 Code I, and consider filing Form 8082. 

[AtlasDaniel]

Thanks for the info. I don't do the partnership return. Unfortunately. It's a music royalty interest. I've always felt something about the K-1was wrong, but in my prior years it didn't matter.

Take care.