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Federal input screens

Screen K1-2 - Schedule K-1, 1065 / 1120S - Current Income (1040)

Enter a unique activity name to display after the entity name in various forms, worksheets, and statements to distinguish this unit from other units with the same entity name.
When a Schedule K-1 displays information for more than 1 activity and the activities need to be reported separately, enter the data for 1 activity in this unit. Add an additional unit for each activity as needed. Use the same EIN number for each unit comprising the Schedule K-1. All units with the same EIN are combined into 1 Partner’s / Shareholder’s Basis Worksheet, per Revenue Ruling 84-53.
Select the appropriate activity type code. Codes
1
 and
2
 are for entities with passive activities. Codes
3
 and
4
 are for those with non-passive activities.
When there are passive carryovers, and this code is
3
 or
4
, the activity is considered a former passive activity. Income and losses from former passive activities are reported as follows.
  • If the current-year net income is less than the prior-year suspended losses, both prior-year suspended losses and current-year net income are reported on Form 8582.
  • If the current-year net income is equal to or greater than the prior-year suspended losses, neither amount is reported on Form 8582.
  • If the current year is a net loss, only the prior-year suspended losses are reported on Form 8582.
The passive portion of entities with a passive code of
3
 is treated as other passives. Those with a code of
4
 are treated as rental real estate.
Enter
X
 to indicate that this activity is a publicly traded partnership and to apply the passive activity rules related to publicly traded partnerships. The entity's other activities will use the passive activity code unless the type of entity selected in the K1 screen is
4 Publicly traded partnership
.
By default, all income from a partnership or S corporation activity is included in net investment income for Form 8960 when the
Passive activity code
 field in the K1 screen is
1
 or
2
.
Enter a code in this field to assign the net investment income treatment for this activity if it's different from the default treatment. All the income from the activity is based on this code, regardless of the passive and nonpassive designations reported on Schedule E.
Mark this field if the partnership or S corporation is involved in farming, as defined in Form 1040 (Schedule J) Income Averaging for Farmers and Fishermen instructions. The income or loss from this activity, along with other farm and fishing income, determines the farming and fishing income eligible for the calculation of elected farm income on Form 1040 (Schedule J).
Partnerships with this checkbox marked are treated as farm partnerships for the purposes of Schedule SE. If the activity is also passive, the overall isn't allowed loss on the AMT version of Form 8582, in accordance with the tax shelter passive farm rules.
Mark this field if the activity is involved in fishing, as defined in Form 1040 (Schedule J) instructions. The income or loss from this activity, along with other farm and fishing income, is used to determine the farm income eligible for the calculation of elected farm income on Form 1040 (Schedule J).
Enter
X
 to indicate this K1 activity wasn't active for the current tax year. Any data entered on this activity's input screens and asset detail is ignored. This unit will proforma to next year. When activity resumes, clear this field.
Enter
1
 for a complete disposition of the activity. Prior-year suspended passive losses are released and the activity, plus data from any other related input screens, is deleted during next year's proforma process. If the activity has any passive activity credit carryforwards, the activity will proforma to keep the passive credits available to use against other passive income per Form 8582-CR instructions.
Enter
2
 if this is a passive activity that was sold on an installment basis. The installment dispositions are treated as follows.
  • Any allowed losses for the current tax year are calculated by multiplying the overall loss by the ratio of current-year gain recognized divided by unrecognized gain as of the beginning of the tax year. Losses in excess of the allowed amount are suspended and proforma'd to the following tax year.
  • When the net income or gain recognized in the current year exceeds all of the current and carryforward losses, all losses are allowed in the current year. Also, data in any other related input screens are deleted during next year's proforma process. Any activity that is coded
    2
     with no passive loss carryovers, plus data in any other related input screens, is deleted during next year's proforma process.

Partner's / Shareholder's Share of Current Income

To access the State allocation spreadsheet, the following conditions must be present in the current client.
  • The client being processed must include at least 1 state return.
  • You must be viewing Client Organizer Data Entry or Input Screen Data Entry.
  • For the K1, K1-2, K1-3, K1-4, K1-5, K1-6, K1-7, PBasis1, PBasis2, SBasis1, SBasis2, K1T, and K1T-2 screens, the
    Name of entity
     field must contain data.
When these conditions have been met, select the Allocation icon in this screen to access the spreadsheet.
Two methods (percentage or amount) of allocation are available to allocate federal amounts to the applicable states displayed in the State allocation spreadsheet.
  • Percentage
    : Enter a percentage in XXX.XX format in the 1st field available in the State allocation spreadsheet. Select the state to which this percentage applies from the fieldview and select
    Apply
    . The amounts attributable to that state automatically calculate and the amounts display in the spreadsheet. The percentage entered for that particular state will appear below the state name for easy reference. If enabled, you can overwrite individual item amounts on the spreadsheet from the calculated amount.
  • Amount
    : In cases where a percentage of the federal amounts don't apply, you can enter individual item amounts, if enabled, in the spreadsheet for the applicable state. Zero (0) is a valid entry and will prevent the state amount from defaulting to the federal calculated amount. If an individual item amount field is blank, the federal amount, if present, will be used in the state's calculation.
You can print the State allocation spreadsheet in a report format for future reference. Select
Print
 or
Preview
. If licensed, you can also print to FileCabinet CS.
Exporting and importing allocation information to and from Excel
You can use the state allocation spreadsheet in the K1 and K1T screens to quickly and efficiently export and import allocation information to and from UltraTax/1040 and a Microsoft Excel workbook. For more information, see Using the Excel Export / Import utility for multi-state allocation information.
Enter state amounts if different from the federal amounts. For more information, access the input screen help for the appropriate state application by using F1 from within a state input screen. Also, refer to Processing multiple-state returns.
Enter the net income or loss from other rental activities. This information is used to determine the income / loss to be reported on Schedule E, Page 2. Per 1065/1120 Schedule K-1 instructions, the amount of other net rental income is a passive activity. The passive activity code field is ignored, and the amount entered is treated as passive for completing Form 8582.
If the activity code is 3, 4, or blank for this unit, only the data in this field will be treated as passive. If the K-1 entity contains data such as section 1231 gains/losses, other income/loss, other deductions, AMT adjustments, and credits related to other rental income, then you must create 2 or more K1 screen activities to treat the items as passives for Form 8582.
When the activity isn't passive, other rental income is treated as passive income per Schedule K1 instructions. Use this field to treat other rental income as nonpassive. When the passive activity code indicates the activity is passive, other rental income will be treated as passive, regardless of whether this field is marked.
Guaranteed payments are classified as non-passive income, and this amount, along with other non-passive income, is used as follows.
  • Entered in column (j) of Schedule E, Part II.
  • Reported on Form 6198, Part I as other income for activities that are subject to at-risk limitations.
  • Used in the allocation of the at-risk amount.
If the entity doesn't have any special types of interest income, enter the amount in the input screen and not in the attached statement. Otherwise, use the attached statement to classify the interest income using the same codes as found in the Interest income statement in the B&D screen. Any amount entered in the input screen is treated as fully taxable. The information below describes how information in the attached statement affects the calculation of the client's federal and state tax returns.
  • F/S
    : Use this field only if you're preparing multiple-state tax returns. For multiple-state returns, make duplicate line entries of an interest item for each applicable state, using a different postal code for each entry. Enter
    S
     here for all but 1 of the duplicate line entries. The federal application disregards entries with the
    S
     code.
  • State processing
    : Enter an amount or percentage in the
    US Ob $ or %
     field to indicate the portion, if any, that is attributable to U.S. government obligations (nontaxable to the state).
Municipal and Other Tax-Exempt Interest
Enter the total tax-exempt interest (including interest income attributable to private activity bonds issued after 8/7/86) in the
Tot Tax Exempt
 field in the statement. Items entered in this field transfer to the Tax-exempt interest line on Form 1040, Page 1. If a portion of the tax-exempt income is attributable to private activity bonds issued after 8/7/86, you must also enter that portion in the
AMT Int Income (PAB)
 field in the statement. Amounts entered in this field will only be used for Form 6251, Alternative Minimum Tax, calculations and will transfer to the appropriate line of Form 6251.
For state processing
: Enter a percentage in the
In-State Muni %
 field to indicate the portion of the amount entered in the
Tot Tax Exempt
 field, if any, that is nontaxable to the integrated state.
When processing 2 or more state returns, make duplicate line entries for those interest items with different information for each state. For example, each state may require a different
In-State Muni $ (or %)
 or
In-State Source %
. Enter a postal code to direct each line entry to a particular state return. When you use duplicate line entries, select
S
 in the
F/S
 field for all but 1 of your duplicate entries, so that the federal application disregards the "state only" entries. The state applications disregard entries with
F
 in the
F/S
 field as well as any entries with
S
 in the
F/S
 field that also have an out-of-state postal code.
State Use:
  • Enter a code for processing the 1040 state return. The codes that are available are specific to the code entered in the
    State
     field. If state use codes aren't applicable to the entered state, this field will be disabled (shaded) in most instances (see the following note for a description of exceptions). See the table below for the interest income state use codes and applicable states.
State Use code
Applicable description
State
1
Tax credit bond interest
AL, GA, ID, KY, MD, MO, NE, NY
2
Subject to Income Tax
TN
3
Municipals purchased after 1/1/03 and subject to tax
UT*
4
Accounts Receivable - Intangibles
KS
5
Notes Receivable - Intangibles
KS
6
Bonds, Debentures & Certificates of Indebtedness
KS
7
Municipals purchased after 12/31/11 and subject to tax
IN
8
Bank, Credit Union, & Savings and Loans
KS, MA, OK, PHL
10
Non-taxable
HI, ME, NH, TN
11
Domestic international sales corporation
OR
13
Export Development Act bonds
of 1983
IL
14
Taxable health savings account interest
WI
15
Housing Development Authority bonds and notes
IL
16
Tri-County River Valley Development Authority Bonds
IL
17
Dev Finance Authority (venture fund / infrastructure bond)
IL
18
Quad Cities Regional Economic Dev bonds and notes
IL
19
College Savings bonds
IL
20
Sports Facilities Authority bonds
IL
21
Higher Education Student Assistance Act bonds
IL
22
Dev Finance Authority (sections 7.8 through 7.87)
IL
23
Rural Bond Bank Act bonds and notes
IL
24
Dev Finance Authority (Asbestos Abatement Act)
IL
25
Quad Cities Interstate Metropolitan Authority bonds
IL
26
Southwestern Illinois Development Authority bonds
IL
27
Finance Authority bonds
IL
28
Guam bonds
IL
29
Puerto Rico bonds
IL
30
Virgin Island bonds
IL
31
American Samoa bonds
IL
32
North Mariana Islands bonds
IL
33
Mutual Mortgage Insurance bonds
IL
34
Student Assistance Corporation bonds
VT
35
Telecommunications Authority bonds
VT
36
Power Agency bonds
IL
37
Central Illinois EDA bonds
IL
38
Eastern Illinois EDA bonds
IL
39
Southeastern Illinois EDA bonds
IL
40
Southern Illinois EDA bonds
IL
41
Urban Development Authority bonds
IL
42
Downstate Sports Facilities bonds
IL
43
Western Illinois EDA bonds
IL
44
Upper River Valley Development bonds
IL
45
Will-Kankakee Regional Development Authority bonds
IL
46
Public Power Supply Authority Bonds
VT
  • Do Not Proforma:
     Enter
    X
     in this field to delete the item on next year's proforma.
Part-Year Resident Returns:
Enter a percentage if a portion of the interest item is in-state source income. For example, enter
50.000
 in this field if the item is 50% in-state source income for the state indicated in the
State
 field. Enter
0.000
 in this field if none of the interest income amount is in-state source income for the state that corresponds to the entry in the
State
 field.
Nonresident Returns:
Enter
100.000
 in this field if the interest item is all in-state source income for the nonresident state that corresponds to the entry in the
State
 field. Leave this field blank if none of the interest income amount is in-state source income for the state indicated in the
State
 field.
If the entity has no special types of dividend income, enter the amount in the input screen and not in the attached statement. Otherwise, use the attached statement to classify the dividend income using the same codes and fields as found in the
Dividend Income
 statement in the B&D screen. Entries in the attached statement affect the calculation of the client's federal and state tax returns as follows.
  • F/S
    : Use this field only if you're preparing multiple-state tax returns. For multiple-state returns, make duplicate line entries of a dividend item for each state as necessary, with a different postal code for each entry. In the
    F/S
     field, select
    S
     for all but 1 of the duplicate line entries. The federal application disregards entries coded
    S
    .
  • Payer
    : Enter the payer name. A custom fieldview is available for this field.
  • Ordinary Dividend
    : Enter ordinary dividend amounts from Schedule K-1. Don't enter tax-exempt dividends in this field.
  • Qualified Dividend
    : Enter qualified dividend amounts from Form Schedule K-1. Don't enter tax-exempt dividends in this field.
  • Tax Exempt Amount
    : Enter total tax-exempt dividend amounts (including dividend income attributable to private activity bonds issued after 8/7/86). Don't enter tax-exempt dividends in the
    Ordinary Dividend
     or
    Qualified Dividend
     fields.
  • AMT Exempt Div (PAB)
    : Enter dividend income attributable to private activity bonds issued after 8/7/86. Amounts entered in this field are used only for Form 6251 calculations. You must also enter the amount in the
    Tax Exempt Amount
     field for Schedule B purposes.
  • US Ob $ (or %)
    : For state processing, enter a percentage in this field if any portion of the dividend income is attributable to U.S. government obligations (nontaxable to the state). For example, enter
    12.5000
     in this field if the item is 12.50% attributable to U.S. government obligations; enter
    25
     in this field if $25 of interest is U.S. government interest. Note that the
    US Ob $ (or %)
     field is applicable only for dividend items entered in the
    Ordinary Dividend
     field. The application disregards a
    US Ob $ (or %)
     entry for items entered in the
    Tax Exempt Amount
     and
    AMT Exempt Div (PAB)
     fields.
  • In-State Muni $ (or %)
    : For state processing, enter a percentage in this field to indicate the portion of the municipal or other tax-exempt dividend income (items entered in the
    Tax Exempt Amt
     field) that's nontaxable to the integrated state. For example, enter
    8.000
     in this field if the item is 8.0% attributable to municipal obligations of the integrated state; enter
    50
     in this field if $50 of the tax exempt interest is attributable to municipal obligations of the integrated state. Note that the
    In-State Muni $ (or %)
     field is applicable only for dividend items entered in the
    Tax Exmt Amt
     field. The application disregards an In-State Muni $ (or %) entry for items entered in the
    Ordinary Dividend
     and
    AMT Exempt Div (PAB)
     fields.
  • In-State Source %
    : This field is applicable only to part-year resident and nonresident state returns.
    In-State Source %
     defaults to 100% for part-year resident state returns if the part-year resident state is entered in the
    State
     field. However,
    In-State Source %
     defaults to 0% for all nonresident state returns and part-year resident state returns if the
    State
     field is blank or doesn't match the part-year resident state being processed.
  • State
    : Enter a state postal code unless you're processing 1 resident state return or no state return. For a single resident state return, a blank
    State
     field will allow the federal amounts to transfer to the state return. If this field is blank, the related amount won't transfer to any part-year resident and/or nonresident integrated state returns.
    When processing 2 or more state returns, make duplicate line entries for those dividend items where you must enter different information for each state. For example, a different
    US Ob $ (or %)
    ,
    In-State Muni $ (or %)
    , or
    In-State Source %
     may be required for each state. Enter a postal code to direct each line entry to a particular state return. When duplicate line entries are used, select
    S
     in the
    F/S
     field for all but 1 of your duplicate entries, so that the federal application disregards the state only entries.
    See State fields in UltraTax/1040 for more information.
  • State Use
    : Enter a code as applicable for processing the 1040 state return. If state use codes aren't applicable to the entered state, this field will be disabled (shaded) in most instances (see the following note for a description of exceptions). Enter a code for processing the 1040 state return. The dividend income state use codes and applicable states are listed in the table that follows.
    State Use code
    Applicable description
    State
    1
    Subject to Intangibles
    KS
    2
    Subject to Income Tax
    TN
    3
    Municipals purchased after 1/1/03 and subject to tax
    UT
    5
    Regulated Investment Co. Dividends - U.S. Obligations
    NE
    7
    Municipals purchased after 12/31/11 and subject to tax
    IN
    8
    Banks, Credit Unions, & Savings and Loans
    MA, OK
    11
    Domestic international sales corporation
    OR
    13
    Export Development Act bonds
    of 1983
    IL
    15
    Housing Development Authority bonds and notes
    IL
    16
    Tri-County River Valley Development Authority Bonds
    IL
    17
    Dev Finance Authority (venture fund / infrastructure bond)
    IL
    18
    Quad Cities Regional Economic Dev bonds and notes
    IL
    19
    College Savings bonds
    IL
    20
    Sports Facilities Authority bonds
    IL
    21
    Higher Education Student Assistance Act bonds
    IL
    22
    Dev Finance Authority (sections 7.8 through 7.87)
    IL
    23
    Rural Bond Bank Act bonds and notes
    IL
    24
    Dev Finance Authority (Asbestos Abatement Act)
    IL
    25
    Quad Cities Interstate Metropolitan Authority bonds
    IL
    26
    Southwestern Illinois Development Authority bonds
    IL
    27
    Finance Authority bonds
    IL
    28
    Guam bonds
    IL
    29
    Puerto Rico bonds
    IL
    30
    Virgin Island bonds
    IL
    31
    American Samoa bonds
    IL
    32
    North Mariana Islands bonds
    IL
    33
    Mutual Mortgage Insurance bonds
    IL
    34
    Student Assistance Corporation bonds
    VT
    35
    Telecommunications Authority bonds
    VT
    36
    Power Agency bonds
    IL
    37
    Central Illinois EDA bonds
    IL
    38
    Eastern Illinois EDA bonds
    IL
    39
    Southeastern Illinois EDA bonds
    IL
    40
    Southern Illinois EDA bonds
    IL
    41
    Urban Development Authority bonds
    IL
    42
    Downstate Sports Facilities bonds
    IL
    43
    Western Illinois EDA bonds
    IL
    44
    Upper River Valley Development bonds
    IL
    45
    Will-Kankakee Regional Development Authority bonds
    IL
    46
    Public Power Supply Authority Bonds
    VT
  • Do Not Proforma
    : Enter
    X
     in this field to delete the item on next year's proforma.
Municipal and Other Tax-Exempt Dividends:
Enter the total tax-exempt dividends (including dividend income attributable to private activity bonds issued after 8/7/86) in the
Tax Exempt Amount
 field in the statement. Items entered in this field transfer to the Tax-exempt interest line on Form 1040, Page 1. If a portion of the tax-exempt income is attributable to private activity bonds issued after 8/7/86, you must also enter that portion in the
AMT Exempt Div (PAB)
 field in the statement. Amounts entered in these fields are used for Form 6251, Alternative Minimum Tax, calculations.
  • State processing
    : Enter an amount or percentage in the
    In-State Muni $ or %
     field to indicate the portion of the amount entered in the
    Tax Exempt Amount
     field, if any, that is nontaxable to the integrated state.
Part-Year Resident Returns:
Enter a percentage if a portion of the dividend item is in-state source income. For example, enter
50.000
 in this field if the item is 50% in-state source income for the state as indicated in the
State
 field. Enter
0.000
 in this field if none of the dividend income is in-state source income for the state that corresponds to the entry in the
State
 field.
Nonresident Returns:
Enter
100.000
 in this field if the dividend item is all in-state source income for the nonresident state that corresponds to the
State
 field entry. Leave this field blank if none of the dividend income is in-state source income for the state indicated in the
State
 field.
Enter the short-term portfolio capital gains / losses as reported on Schedule K-1. They are subject to basis and at-risk limitations, if applicable. For capital gains that aren't portfolio, use the business capital gains/losses fields, if applicable. For sales of partnership interest or shareholder stock, enter the information in the B&D screen, in the statement attached to the
Schedule for detail
 field instead of this screen. Enter those sales as business and associate with this activity. Passive capital gains and losses entered in the B&D screen statement and coded
B
 for business are linked to the K1 activity by completing the Form and Unit columns. Don't enter in both places. Gains and losses entered in the B&D screen statement that aren't coded B for business will be treated as portfolio, not passive.
Enter the total long-term portfolio capital gains / losses as reported on Schedule K-1. They are subject to basis and at-risk limitations, if applicable. For capital gains that aren't portfolio, use the business capital gains/losses fields, if applicable. For sales of partnership interest or shareholder stock, enter the information in the B&D screen, in the statement attached to the
Schedule for detail
 field instead of this screen. Enter those sales as business and associate with this activity. Passive capital gains and losses entered in the B&D screen statement and coded B for business are linked to the K1 activity by completing the Form and Unit columns. Don't enter in both places. Gains and losses entered in the B&D screen statement that aren't coded B for business will be treated as portfolio, not passive.
Enter the 28% rate gain as reported on Schedule K-1 (Form 1065 or 1120S). The amounts will be reported on the 28% Rate Gain Worksheet.
This field follows the K1 as issued. Therefore, this field is treated as a subset of net long-term capital gain and/or net section 1231 gain (loss) fields and used solely for the calculation of the Unrecaptured Section 1250 Gain Worksheet.
Use the statement to enter amounts of other income and loss items for the K-1 entity. Any amount after limitations will be reported separately as income on Schedule E, Page 2. Amounts entered directly in this field instead of the statement will appear on Schedule E, Page 2 as Other Income.
Enter the short-term capital gains / losses as reported on Schedule K-1. The amount entered is subject to basis, at-risk, and passive activity loss limitations, if applicable. For non-K1 capital sales such as the sale of the partnership interest or shareholder's stock, enter the information in the B&D screen in the statement attached to the Schedule for detail field instead of this screen. Passive capital gains and losses entered in the B&D screen statement and coded
B
 for business are linked to the K1 activity by completion of the Form and Unit columns. Don't enter in both places. Gains and losses entered in the B&D screen dialog that are not coded
B
 for business will be treated as portfolio, not passive.
Enter the long-term capital gains / losses as reported on Schedule K-1. The amount entered is subject to basis, at-risk, and passive activity loss limitations, if applicable. For non-K1 capital sales such as the sale of the partnership interest or shareholder's stock, enter the information in the B&D screen in the statement attached to the Schedule for detail field instead of this screen. Passive capital gains and losses entered in the B&D screen statement and coded
B
 for business are linked to the K1 activity by completion of the Form and Unit columns. Don't enter in both places. Gains and losses entered in the the B&D screen that aren't coded
B
 for business will be treated as portfolio, not passive.
Enter the 28% rate gain as reported on Schedule K-1 (Form 1065 or 1120S). The amounts will be reported on the 28% Rate Gain Worksheet.
Information from this statement is used to complete Schedule D, Part II, Long-term Capital Gains and Losses. The
Qualifies for section 1202 exclusion
 checkbox in the K1 screen must be marked. Section 1202 gains should only be entered in the
Section 1202 gain
 field.
The calculation of passive losses allowed per Regulation Section 1.469 uses the amount entered here. The total interest income received should be entered in the normal location. Use this field to enter the portion of interest income to be treated as passive-activity income on Form 8582 worksheets 1 and 3.
Use this statement to enter required information for the following election statements.
  • Statement of Disproportionate Distribution From a Partnership Holding Code Sec. 751 Property (Regulation 1.751-1(b)(5))
  • Statement of Sale or Exchange of Interest in Partnership That Has Code Sec. 751 Property (Regulation 1.751-1(a)(3))
The application automatically prints the tax election(s) with the return. If the return is being electronically filed, the tax election(s) will be included in the electronic file.
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