Common questions about partnership passthrough K-1s in Lacerte
by Intuit• Updated 1 year ago
Below, you'll find answers to frequently asked questions about passthrough K-1s in Lacerte:
- Go to Screen 22, Other Schedule K items.
- Scroll down to the Deductions section.
- In the Other Deductions (Ctrl+E) field, press Ctrl+E.
- Select the desired code from the K-1 Code (Ctrl+T) dropdown menu.
- Enter a Description.
- If you don't enter a description, the item won't be available on Screen 29, Special Allocations. The description will appear in blue text on Screen 29.
- Enter the Federal amount, then a Description, St. if diff., or State if applicable.
- Select the Ins (insert) button and repeat steps 4–7 if you wish to enter more items.
- Select OK after entering all items.
- Make sure the amounts on the Schedule K (Form 1065) and Schedule K-1, Line 13 are correct.
- Make sure the allocations to the partners on the Schedule K-1, Box 13 are correct. If you need to change any of the amounts:
- Go to Screen 29, Special Allocations.
- Select the Deductions (Sch. K-1, Boxes 12–13) folder.
- If you don't see this folder under the Section view, revisit steps 3–6 above. If entered correctly, you should see the Deductions folder.
- Select Other Deductions, Other Deductions (Sch. K), then your deduction's description (in blue text).
- You'll see the total amount available for special allocation under the Allocations (29) window.
- Enter the desired amount for the applicable partners in the Allocation Amount column.
If the Other Deductions are from a passthrough entity:
- Go to Screen 23, Passthrough K-1's.
- Select Other Deductions(13) in the Section view.
- Go to Other deductions (Ctrl+E).
- Repeat steps 1–10 above.
- Go to Screen 22, Other Schedule K items.
- In the Other income (loss) (Ctrl+E) field, press Ctrl+E.
- Select the desired code from the K-1 Code (Ctrl+T) dropdown menu.
- Enter a Description.
- If you don't enter a description, the item won't be available on Screen 29, Special Allocations. The description will appear in blue text on Screen 29.
- Enter the Federal amount (enter loss as a negative amount), then a Description, St. if diff., or State if applicable.
- Select the Ins (insert) button and repeat steps 4–7 if you wish to enter more items.
- Select OK.
- Make sure the amounts on the Schedule K (Form 1065) and Schedule K-1, Line 11 are correct.
- Make sure the allocations to the partners on the Schedule K-1, Box 11 are correct. If you need to allocate the amounts differently than the Profit Sharing Percentage:
- Go to Screen 29, Special Allocations.
- Select the Income (Sch. K-1, Boxes 1–11) folder.
- If you don't see this folder under the Section view, revisit steps 3–6 above. If entered correctly, you should see the Income folder.
- Select the Other Income folder, Other Icnome (Sch. K-1), then your income description (in blue text).
- You'll see the total amount available for special allocation under the Allocations (29) window.
- Enter the desired amount for the applicable partners in the Allocation Amount column.
If the Other Income (Loss) is from a passthrough entity:
- Go to Screen 23, Passthrough K-1's.
- Scroll to section Income (Loss) (1–11).
- In the Other Income (loss) (11) (Ctrl.+E) field, repeat the steps above.
Entering cash charitable contributions:
- Go to Screen 22, Other Schedule K Items.
- Scroll down to the Deductions section.
- Under the Charitable Contributions, Cash subsection, enter your charitable contributions in the 60% limitation or 30% limitation field.
Enter noncash charitable contributions:
Noncash contributions are located on Screen 50, Noncash Contributions, but you can adjust them in Screen 22, Other Schedule K Items.
Depending on when the noncash contributions were made, they may be subject to the 50% and 30% adjusted gross income (AGI) limits. Limitations apply at the partner's level.
- Go to Screen 50, Noncash Contributions (8283).
- Enter any applicable items.
Adjusting noncash contributions
(adjustments appear on Schedule K, but not on Form 8283):
- Go to Screen 22, Other Schedule K Items.
- Under the Section view, select Deductions.
- Under the Charitable Contributions, Noncash subsection, enter your noncash charitable contribution in the following fields:
- 50% limitation [A]
- 30% limitation [A]
- 30% capital gain property [A]
- 20% capital gain property [A]
You can find additional inputs on Screen 23, Passthrough K-1's. Charitable contributions flow to the Schedule K/K-1 to line 13A.
- Go to Screen 23, Passthrough K-1's.
- Under the Section view, select Other Deductions (13).
- Under the Charitable Contributions section, enter your cash or noncash contributions.
- For cash:
- 50% limitation (A)
- 30% limitation (B)
- For noncash:
- 50% limitation (C)
- 30% limitation (D)
- 30% capital gain property (E)
- 20% capital gain property (F)
- For cash:
Schedule M-1 and Schedule M-2 considerations
Lacerte doesn't automatically adjust the difference between item cost/basis and item fair market value (FMV).
The FMV appears on Schedule K and flows through Schedule M-1 and Schedule M-2 into the "Partner Capital Accounts" balance sheet.
If the contributed item was carried on the books at cost, make a manual M-1 or M-2 adjustment to make Schedule M-1, Line 1 conform to "Book income," or Schedule M-2, Line 9 conform to "Ending Capital Accounts."
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