CLIENT OWNS INTEREST IN PARTNERSHIP AS A SME, HOW TO TRANSFER K1

Forum|Forum|4 years ago
July 22, 2021
2 replies
23 views

Have never encountered this problem before, so I'm not sure how to deal with it.

Client has a SME LLC. She owns a 40% interest in a partnership.

The return for the partnership is complete and has issued K1s.

As a SME she would normally file a Schedule C for this business. However, it occurs to me that I need a way to import the K1 to the return. Currently I cannot import the K1 because the EIN obviously does not match the client's SSN.

How do I go about doing this or otherwise putting this info on the return?

ProSeries Professional

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Best answer by sjrcpa

True. Under the new rules in effect for 2020, if the owner is a disregarded entity, you also need to show the true /beneficial owner's name and SSN on the K-1-Boxes E and H2. It still may not import to the 1040, though.

sjrcpa

Level 15

It goes on Sch E page 2; the same as if she owned her interest in her own name (i.e. the SMLLC is disregarded)

The more I know the more I don’t know.

E

ejdtaxmanAuthor

Level 6

ok sure but that doesn't solve the issue of how do I put the K1 in the return?

I guess I could do it manually but wouldn't I still get the error of the numbers not matching?

Just-Lisa-Now-

Intuit Community Champion

You could enter the K-1 manually, rather than import.

♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪

T

TaxGuyBill

Level 15

@ejdtaxman wrote:

Client has a SME LLC.

She owns a 40% interest in a partnership.

Maybe I'm missing the obvious, but what is the "E" mean? Is this just a Single Member LLC that is disregarded?

If so, the K-1 should be issued in the name of the individual and the SSN, not the LLC or the EIN. The K-1 is entered like any other K-1 on the 1040. It has nothing to do with Schedule C.

If the K-1 is issued to the name of the LLC and/or the EIN that belongs to the LLC, the K-1 is wrong and needs to be corrected.

sjrcpaAnswer

Level 15

True. Under the new rules in effect for 2020, if the owner is a disregarded entity, you also need to show the true /beneficial owner's name and SSN on the K-1-Boxes E and H2. It still may not import to the 1040, though.

The more I know the more I don’t know.

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