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Screen K1 - 1065 and 1120S Pass-Through General and Income (1041)
Overview
Use this screen to enter Schedule K-1 information that the client received from an S Corporation or partnership. There are line reference numbers on the left side of the input screen that correspond to the lines on an 1120S or 1065 Schedule K-1. This will help you determine where you should enter each Schedule K-1 item.
General Information
State
Enter the state's postal code here. If you leave this field blank, the activity’s income is not state source.
Type
Code
1
for partnership is the default. Choosing code 4
for publicly traded partnership determines the tax treatment of the entity and supersedes any code you enter in the Passive activity code
field on the K1-4 screen. Choosing code 5
for farm partnership won’t allow an overall loss on the AMT version of Form 8582.City or state use code
These codes are only applicable to New York and Ohio returns. Enter
NYC
or YON
to indicate this activity should be sourced to the city to calculate city taxes on Form IT-205-A, Schedule 4 and/or to complete Form Y-206, City of Yonkers Nonresident Fiduciary Earning Tax Return. For Ohio returns, enter 10A
to identify that the farm is over 10 acres.Disposition of activity
Enter
1
to delete this activity on next year's return. If this is a passive activity, it will also release all suspended losses.Enter code
2
if this is a passive activity sold on installment. If there are passive loss carryovers, the activity will remain on next year's return and will allow losses based on the ratio of current-year gain recognized divided by unrecognized gain as of the beginning of the current year. If this activity doesn't have passive loss carryovers, only the Sale and/or InstPY screen for this activity will transfer to next year's return.If this activity has assets you must move or transfer them to another activity before you proforma to the next year.
Income
Allocation
Select the Allocation button or choose View then Allocation from the toolbar to open the multi-state allocation grid and allocate federal net income to states. If a field is grayed out for a certain state, it is not applicable in calculating in-state income for that state.
Ordinary business income or (loss)
Enter the ordinary income or loss from the activity. The
Passive activity code
field on the K1-4 screen determines if this income or loss should report on Schedule E, Page 2. If the code is 3
, amounts you enter here is considered nonpassive income or loss. If the code is 1
or 2
, its considered a passive activity for Schedule E, Page 2.Net rental real estate income or (loss)
Enter the net income or loss from other real estate activities. This determines the passive income or loss to report on Schedule E, Page 2.
Other net rental income or (loss)
Enter the net income or loss from other rental activities. This determines the income or loss to report on Schedule E, Page 2. Amounts you enter in this field are treated as passive regardless of the
Passive activity code
you enter on the K1-4 screen.Guaranteed payments to partner
Guaranteed payments are nonpassive income and report on Schedule E, Part II, column (k) with other nonpassive income regardless of the
Passive activity code
you enter on the K1-4 screen.Interest income including tax exempt
Enter federal and state source interest income from Schedule K-1 to complete Form 1041, 1041-QFT, 1040NR, or 5227. Use the statement to enter multiple payers and classify the interest income. If you don't need to enter special percentages or codes, enter the amount directly on the input screen. Amounts you enter directly on the screen are fully taxable. The following table describes the columns available in the statement and how they affect the calculation of the federal and state tax returns.
Fiel | |
|---|---|
Use this field to indicate the interest income you're entering on this line is federal-only or state-only. Typically, you should only use this field if you're preparing more than one state return. | |
Type Code | Use this field to categorize an adjustment amount. If an item of interest income requires an adjustment, enter the total amount received on one line, then create a second line with a type code of 3, 4, 5, or 6, and enter the adjustment as a positive amount in the Taxable Interest field. |
Payer | Use this field to enter the payer's name. You can enter multiple lines with the same payer name if any interest needs different coding. |
Taxable Interest | Use this field to enter taxable interest income and adjustments to interest from Forms 1099-INT and 1099-OID. Don't enter tax-exempt interest in this field. For state returns, the amount you enter in this field may be affected by the US Govt Oblig ($ or %) field; see the details on that field for more. |
Total Tax Exempt | Use this field to enter the amount of tax-exempt interest, including interest income attributable to private activity bonds issued after 8/7/86. Don't include any tax-exempt interest in the Taxable interest field. For state returns, the amount you enter in this field may be affected by the InState Muni ($ or %) field; see the details on that field for more. |
Private Act Bond Portion | Use this field to enter tax-exempt interest income attributable to private activity bonds issued after 8/7/86. Amounts you enter in this field are only for Schedule I calculations. You'll also need to enter this amount in the Total Tax Exempt field for Form 1041, 1041-QFT, 1040NR, or 5227 purposes. |
US Govt Oblig ($ or %) | If any portion of Taxable Interest is attributable to U.S. government obligations and nontaxable to the state, enter the nontaxable amount in this field. If you enter a percentage, the nontaxable amount calculates by applying the percentage to the amount you entered in the Taxable Interest field. Do not use the F/S field for U.S. government obligations. |
InState Muni ($ or %) | If any portion of tax exempt interest is also nontaxable to the state, enter the nontaxable amount in this field. If you enter a percentage, the nontaxable amount calculates by applying the percentage to the amount you entered in the Total Tax Exempt field. The difference between the amount you enter in the Total Tax Exempt field and this field will calculate as taxable interest on the state return you indicate in the Postal code field. |
InState Source ($ or %) | For part-year and nonresident state return calculations, use this field to enter the portion of Taxable Interest that is sourced and taxable to the state you enter in the Postal code field. Taxable interest will not be allocated to the state if you leave this field or the Postal code field blank. |
Postal code | If you've entered anything in the State W/H , US Govt Oblig ($ or %) , InState Muni ($ or %) , or InState Source ($ or %) field, enter the state that the related field applies to. Otherwise, amounts won't transfer to the state return. |
State use | The codes available in this field are specific to the state you enter in the Postal code field. Enter a code, if applicable, to indicate special treatment on the state return. |
Do Not Proforma | Enter X if you don't want this line item to proforma to next year. |
Dividends
Enter federal and state dividend information from Schedule K-1 to complete the applicable dividend line on Form 1041, 1041-QFT, 1040NR, or 5227. Use the statement to enter multiple payers and codes to properly classify the dividend income. If you do not want the payers' names proforma'd and special percentages or codes are not needed for federal or state processing, enter the amounts directly on the input screen. The following table describes the columns available in the statement and how they affect the calculation of the federal and state tax returns.
Column | Information |
|---|---|
F/S | Use this field to indicate the interest income you're entering on this line is federal-only or state-only. Typically, you should only use this field if you're preparing more than one state return. |
Type Code | If you need to make an adjustment for nominee amounts, create one line for the total amount and leave this field blank. Then create a second line, enter code 3 in this field, and enter the adjustment as a positive amount in the same column that you entered the total dividend income in. |
Payer | Use this field to enter the payer's name. You can enter multiple lines with the same payer name or you can consolidate similar payer's onto one line. |
Total Dividend | Enter ordinary dividend amounts from Forms 1099-DIV or similar statements to complete the applicable line on Form 1041, 1041-QFT, 1040NR, or 5227. Do not enter tax-exempt dividends in this field. |
Qual Div Portion | Enter the amount of dividends that qualify for long-term capital gain rates from Forms 1099-DIV to complete the applicable line on Form 1041, 1041-QFT, 1040NR, or 5227. Enter the entire ordinary dividend amount, including qualified dividends, in the Total Dividends field. Do not enter tax-exempt dividends in this field. |
Total Cap Gain Dist | Enter total capital gain distribution amounts from Form 1099-DIV or similar statements to complete Schedule D, line 9, column (f). |
1250 Portion | Enter unrecaptured section 1250 capital gain distribution amounts from Form 1099-DIV or similar statements. |
1202 Portion | Section 1202 gains reported in Form 1099-DIV, box 2d may or may not qualify for the exclusion depending on the shareholder's holding period. Enter 100 percent of section 1202 gains from Form 1099-DIV and if they qualify for the exclusion, enter a code in the 1202 Code field. Enter the description to print with the exclusion on Schedule D in the Corporation related to excluded 1202 stock sale: Reported on 1099-DIV field on screen Income. |
1202 Code | Use this field to distinguish whether the 1202 gain qualifies for the 50-percent, 60-percent, 75-percent, or 100-percent exclusion. Leave this field blank if the gain does not qualify for the exclusion. |
28% Portion | Enter 28-percent capital gain distribution amounts from Form 1099-DIV or similar statements. UltraTax CS prints this information on the Schedule D 28% Rate Gain Worksheet. |
Total Tax Exempt | Enter total tax-exempt dividend amounts, including dividend income attributable to private activity bonds issued after 8/7/86. Do not enter tax-exempt dividends in the Total Dividends or Qual Div Portion fields. |
Private Act Bond Portion | Enter dividend income attributable to private activity bonds issued after 8/7/86. Amounts entered in this field are used only for Schedule I calculations. You must also enter the amount in the Tax Exempt field for Form 1041, 1041-QFT, 1040NR, or 5227 purposes. |
US Govt Oblig ($ or %) | If any portion of total dividends are attributable to U.S. government obligations and nontaxable to the state, enter the nontaxable amount in this field. This field is only applicable to ordinary dividends you enter in the Total Dividends field. If you enter a percentage, the nontaxable amount calculates by applying the percentage to the amount you entered in the Total Dividends field. Do not use the F/S field for U.S. government obligations. |
InState Muni ($ or %) | For state returns, enter the portion of the municipal dividend income (items entered in the Total Tax Exempt field) that is nontaxable to the state indicated in the Postal Code field. This field is only applicable to tax-exempt dividends you entered in the Total Tax Exempt field. If you enter a percentage, the nontaxable amount calculates by applying the percentage to the amount you entered in the Total Tax Exempt field. The difference between the amount you enter in the Total Tax Exempt field and this field will calculate as taxable dividend income on the state return you indicate in the Postal code field. |
InState Source ($ or %) | For part-year and nonresident state return calculations, use this field to enter the portion of ordinary dividends that are sourced and taxable to the state you enter in the Postal code field. This field is only applicable to the ordinary dividends you entered in the Total Dividends field. Dividend income will not be allocated to the state if you leave this field blank. |
Postal Code | If you've entered anything in the State W/H , US Govt Oblig ($ or %) , InState Muni ($ or %) , or InState Source ($ or %) field, enter the state that the related field applies to. Otherwise, amounts won't transfer to the state return. |
State Use | The codes available in this field are specific to the state you enter in the Postal code field. Enter a code, if applicable, to indicate special treatment on the state return. |
Net portfolio short-term / long-term capital gain or (loss)
Enter the portfolio capital gains or losses reported on Schedule K-1. For capital gains that are not portfolio, use the
Net business short-term / long-term capital gain / loss
fields. For sales of partnership interest on shareholder stock, use the Income screen in the Income folder instead of this screen. Enter those sales in the Capital gains or (losses)
statement as business (code B
in the Type
field) and associate with this activity using the Form
and Unit
fields. Do not enter information in both screens. Gains and losses you enter on the Income screen that are not coded B for business will be treated as portfolio, not passive.Collectibles (28%) capital gain / loss
Enter the 28-percent rate gain as reported on Schedule K-1. This amount represents a portion of the net long-term capital gain amount subject to the 28-percent rate. You must enter an amount in both this field and the field for the long-term capital gain amount to calculate the transaction.
note
There are two of these fields on this screen. One for portfolio capital gains and one for all other business capital gains.
Other income or (loss) reported on Schedule E
Amounts you enter here are added to the amounts in the
Ordinary business income or (loss), Net rental real estate income or (loss),
and Other net rental income or (loss)
fields to determine the income or loss to report on Schedule E, Page 2 (net of any passive depletion). These amounts are subject to passive loss limitations if applicable.Other income or (loss) reported on Form 1041, line 8
In the statement, enter other income from the following sources: Section 951A income, Section 965(a) inclusion, and Subpart F income other than sections 951A and 965 inclusion.
Self charged interest
Enter the amount of self-charged interest from the partnership or S Corporation to include in passive income for purposes of calculating passive losses allowed. Enter the related interest income as normal.
Section 751 information
Enter information for disproportionate distributions from a partnership holding and the sale or exchange of interest in a partnership. Required statements will be available with the Schedule E to satisfy IRS requirements.