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Troubleshooting Lacerte diagnostic ref. #25213 - Allocation factor for shareholders doesn't equal 100%

by Intuit•1• Updated 1 year ago

The following critical diagnostic is generating in Lacerte:

Total Allocation Factor for the Shareholders is Not Equal to 100%. You have entered information that is computing a total allocation factor of XXX%. Check your entries for each shareholder in Screen 6 and/ or Screen 7 and adjust as necessary." (ref. #25213)

In prior years, this was diagnostic ref. #25206.

Follow these steps to resolve the diagnostic:

Go to Screen 6, Stock Ownership.
Locate the Number of Shares Owned subsection.
Make sure that either:
- The number of shares owned at End of tax year is correct, or
- The Percentage of stock owned at year end (xx.xxxxxx) [O] equals 100%
Go to Screen 7, Change in Stock Ownership.
Make sure that either:
- The Number of shares owned (-1=none) adds up to the total of Shares entered on Screen 6, Stock Ownership in each period for each shareholder, or
- The Percentage (xx.xxxxxx)(-1=none) [O] equals 100% for each shareholder

This diagnostic can also generate due to a rounding issue on a change of ownership. If this is due to rounding, use the Shareholder's ownership percentage (xxx.xxxxx)(Box F of K-1 only) [O] on Screen 36, Schedule K-1 Misc./Schedule B-1to enter ownership percentages equal to 100%.

Example

Below is an example of an overstated amount causing the diagnostic to generate:

On Screen 6, Stock Ownership, the following information is entered:

Shareholder 1= 100 number of shares owned at End of tax year
Shareholder 2= 50 number of shares owned at End of tax year

On Screen 7, Change in Stock Ownership, the following information is entered:

Shareholder 1 (Period 1)= 150 Number of shares owned
Shareholder 1 (Period 2)= 100 Number of shares owned

Shareholder 2 (Period 1)= 50 Number of shares owned
Shareholder 2 (Period 2)= 50 Number of shares owned

This diagnostic is generating because the Number of shares owned for period one is overstated by 50. If the total of shares on Screen 6 = 150 shares, then the total of shares for period 1 must equal 150 and the total of shares for period 2 must also equal 150. In this case, Shareholder 2 (Period 1) should = -1 Number of shares owned. Once corrected, this diagnostic will disappear.

Lacerte Tax

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