Screen 25, Passthrough K-1's only has input fields for Schedule K-1, line 18A, Total municipal bonds and In-state municipal bonds.
Follow these steps to enter Schedule K-1, line 18B for a fiduciary return:
- Go to Screen 20, Other Income.
- Enter a Description.
- Check the box labeled Tax-exempt.
- Locate the Accounting Income subsection.
- Enter the amount in the Income field.
- This is the dollar amount of the other income item that is considered a part of the income portfolio for fiduciary accounting purposes.
- Enter the Corpus field, if applicable.
- Use this field if the amount is considered a part of the corpus portfolio for fiduciary accounting purposes.
- Enter the Tax only (not in accounting income) field, if applicable.
- Use this field if the amount is going to be excluded from the calculation of accounting income and used solely for tax purposes.
You may need to increase the fiduciary’s adjusted basis in this partnership by the amount of tax-exempt income. There’s not a specific entry for this, since Lacerte only tracks basis on individual (1040) returns. Refer to the Partner’s Instructions for Schedule K-1 for more information.
