Why is Form 8960 pulling in the wrong amount for line 9b?

[davetodd11]

When I cross-reference the source of 8960 line 9b, PS shows that the amount comes from the Part II, Line 4 of the Distributable Income for Schedules K-1, but it is excluding the amount of taxes on Non-Passive Income (Column 4(e)). Should this not also be included in Form 8960? I don't see anything in the 8960 instructions specifically indicating this should be excluded.

[TaxGuyBill]

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@davetodd11 wrote:
the amount comes from the Part II, Line 4 of the Distributable Income for Schedules K-1, but it is excluding the amount of taxes on Non-Passive Income (Column 4(e)).

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Unless I'm missing something, your lack of information makes it difficult or impossible for anybody to help you.

• What kind of K-1 is it?
• Line 4?  Line 4 of what?  Do you mean Box 4 of the K-1?
• Column 4(e)?  What does that mean?  What form?  I can't find a 4(e) on anything.
• If it is complicated or confusing, attaching pictures may be helpful.

[davetodd11]

It is a 1065 K-1.  

Line 4 of Part II of the "Distributable Income for Schedules K-1".  PS takes you to this worksheet when you right-click on the Form 8960, Line 9b figure, select "Cross-Reference", and you then click link in the Help Center results that come up.  Photo added below:

[TaxGuyBill]

It is probably because I don't have a filled-in K-1 with the proper information, but unfortunately my Cross Reference shows something different, and I can't even find that Distributable Income worksheet.

However, I did notice that the bottom of your first picture mentioned rental income, but it is showing up in the column of the second picture as non-passive income.  Why is it is non-passive?  *IF* the rental is (1) a "trade or business" and (2) is non-passive, then 8960 would not apply to that income.  Might that possibly be what is going on???

[BobKamman]

I have heard of Form 1120S and Form 1065, but not Form 1165

[dkh]

Is picture one for a F1041?   It shows "How to Use 1041"  on the left side under Tax Return Help.

[davetodd11]

There is no rental income from the 1065 K-1 that was provided to the trust. PS indicates in the Help Center data that the "rent and royalty income from: Distributable Income from Schedule(s) K-1 -- Part II, line 4, col (e)" would be included, but I see nothing in the instructions for Form 8960 that would indicate the exclusion of non-rental/non-royalty passive income.  That's what I'm trying to clarify.

[davetodd11]

You are correct.  I see now where I had a typo, and meant 1065.

[davetodd11]

Yes.  This is for a 1041 return for a trust.

[davetodd11]

Still looking for an answer to this issue.  Am I really the only one experiencing it?  If anyone has a clue, and there is more info that I can provide, please let me know.