Allocation of expenses in the Partnership/S Corporation worksheet
The Partnership/S Corporation worksheet is 1 of 4 worksheets that show how expenses are calculated. These worksheets are available in the
Expenses
folder in Forms view.To view this worksheet, right-click and select
Switch to Form
, then select the Expenses
folder.note
The other 3 worksheets are:
- Allocation of Expenses by Income Type—Tax Basis.
- Allocation of Expenses by Income Type—Accounting Income Basis worksheet
- Allocation of Deductions for Tax-Exempt Income
- This worksheet is prepared for each partnership or S corporation activity in theK1 1065, 1120S input screenfolder.
- Accounting income:
- Income reported on a 1065 or 1120S Schedule K-1 is only considered for the tax basis allocation of expenses. The actual distributions received from those Schedule K-1s (entered on theK1-3screen) are considered for the accounting income basis of allocation of expenses, unless you mark theInclude income reportedcheckbox on theDistscreen in theAllocationfolder.
- The accounting income line on the worksheet shows how the distributions were spread across the various income categories. Distributions in excess of income received are listed in the Ordinary Business column. The amounts on this line transfer to the Income line on the Allocation of Expenses by Income Type—Accounting Income Basis Worksheet.
- Portfolio income:This line of the worksheet summarizes the portfolio income of the activity.
- Other deductions:Other deductions reported on Schedule K-1 lines 13L (1065) or 12L (1120S) are only allocable against the portfolio income categories of that activity. To change the allocation, enter the other deductions on theDeductscreen in theDeductionsfolder instead of theK1-2screen for the activity. These allocated amounts transfer to the Other deductions line on the Allocation of Expenses by Income Type—Tax Basis Worksheet.
- Allowable charitable deduction: You can't report the charitable deduction for an activity on the return in excess of the income from the activity. This portion of the worksheet shows the limitation. The allowed portion transfers to Form 1041, Page 2, Schedule A.
