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Common questions about entering passthrough entity K-1 information in Lacerte

by Lacerte Tax 2023 Updated 1 month ago

Below are solutions to frequently asked questions about entering information on the Passthrough K-1's screen in Lacerte.

If your client is a partnership or S-corporation that got K-1 distributions from another business and does not want to pass those distributions on to their respective partners or shareholders, see here instead.

Table of contents:

How do I enter distributions reported on a passthrough K-1 issued to another partnership or S corporation?

There aren't direct inputs specifically for distributions on the Passthrough K-1's screen in the S-Corporate or Partnership modules. You'll need to enter distributions from another passthrough entity in the input screen where you'd report distributions from the entity itself.

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How do I source income for a multi-state passthrough K-1 in the program?

NOTE: This section only applies to the Individual tax module.

When entering a multi-state K-1 in the Passthrough K-1's screen you always want to start with the Federal Amount column. This will make the amounts flow to the federal return and the resident state return.

Sourcing the Federal Amount column:

Press Ctrl+E on your keyboard to open the source box on the Federal Amount column. From here you can choose code N or code S in the Source column to show Lacerte how to source the amounts.

  • Use code N if you want Lacerte to report this amount on the federal return.
    • This will still flow to state returns that start the return on federal amounts. 
  • Use code S if you want Lacerte to report this amount directly on the state return and bypass the federal return.
  • To remove the code N or code S, click in the Source field and choose the blank option at the top of the dropdown list.

Using the State, if different column:

For business returns the state is different field is only available for specific states and specific input fields in the passthrough screen. If the field you need to allocate does not have a state if different column the state may have its own apportionment or allocation method. See Understanding allocation versus apportionment in Lacerte for more information.

You should only use this column when there are differences between federal and state tax law. For example, ordinary income is different between federal and state due to different section 179 limitations.

Using this field will create an adjustment on the state return. This column is most commonly used for the resident state when working with a multi-state return.

State Source Amount column:

This column is used for entering state-specific amounts for nonresident states.

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How do I import or export K-1 information between business returns?

Refer to this article for instructions on importing or exporting K-1 information between business returns in Lacerte.

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Lacerte Tax

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