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How to generate or suppress partner's capital account analysis, K-1, Item L in Lacerte

by Intuit Updated 1 year ago

Not all partnerships are required to complete Schedules L, M-1, M-2, or Item F on Form 1065, page 1, or Item L on Schedule K-1. These are required only if Schedule B, question 4 is marked no.

Schedule B, question 4 on Form 1065 page 2, asks if the partnership satisfies all of the following conditions:

  1. The partnership's total receipts for the tax year were less than $250,000.
  2. The partnership's total assets at the end of the tax year were less than $1 million.
  3. Schedules K-1 are filed with the return and furnished to the partners on or before the due date (including extensions) for the partnership return.
  4. The partnership is not filing and is not required to file Schedule M-3.

Lacerte can check total receipts, total assets, and Schedule M-3. Lacerte cannot determine whether Schedules K-1 were timely furnished to partners.

Follow these steps to answer yes to Schedule B, question 4:

  1. Go to Screen 5, Other Information (Schedule B).
  2. Select the box "Question 4" requirements are met.
    • If total receipts and total assets are both low enough, and Schedule M-3 is not generated, Lacerte automatically omits Schedules L, M-1, M-2 and K-1 (item L).

To force Schedule L, M-1, M-2, and K-1 (Item L) to calculate when question 4 requirements are met:

  1. Go to Screen 25, Balance Sheet Miscellaneous.
  2. Enter 1 in the box Schedules L, M-1, and M-2: 1=force, 2=when applicable [O].
    • This will also print the Schedule K-1, Item L.
Lacerte Tax

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