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How to resolve Lacerte diagnostic ref. 27038 Schedule B Question 4

by Intuit Updated 7 months ago

The following informational diagnostic is generating:

  • 1065 Schedule B, Question 4. If Schedules K-1 are filed with the tax return and furnished to the partners on or before the due date (including extensions), the partnership has met the requirements of Form 1065, Schedule B, Question 4, and is not required to complete Schedules L, M-1, and M-2, item F on page 1 of Form 1065, or item L on Schedule K-1. Check the box "Question 4 requirements are met" (screen 5, code 4) to answer 'yes' to Question 4 and suppress these schedules. To answer "yes" to Question 4 while still printing these schedules, make an additional entry in "Force Schedules L, M-1 & M-2 to print" (screen 25, code 9). This entry also forces the printing of the Analysis of Partner's Capital Account (Schedule K-1, item L). (ref. #27038)

Why is this diagnostic generating?

This informational diagnostic will appear when based on your current input, the partnership seems to meet all four of the following conditions:

  • Total receipts less than $250,000,
  • Total assets at the end of the year less than $1 million,
  • Schedules K-1 timely filed and furnished to partners, and
  • Not required to file Schedule M-3

Lacerte will continue to generate Schedules L, M-1, and M-2 and answer "No" to question 4 unless you make an entry indicating the partnership meets all requirements. This is to prevent accidentally filing noncompliant returns.

To answer 'Yes' to question 4:

  1. Go to Screen 5, Other Information (Schedule B).
  2. Check the box, "Question 4" requirements are met.

Checking this box will also suppress the Schedules L, M-1, and M-2. If you still want to print the schedules:

  1. Go to Screen 25, Balance Sheet Miscellaneous.
  2. Enter a 1 in Schedules L, M-1, and M-2.
Lacerte Tax

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