How do I enter my Schedule K-1 information when my 1120S has values in Boxes 1 and 2, and Box 17 defers to a statement with Codes V, W, and X information for 8 LLCs?

[ab970]

Everything I can find indicates that I should enter two K-1s into TurboTax - one for Box 1 (Ordinary business income) and 1 for Box 2 (Net rental real estate inc). However, other resources suggest creating individual K-1 entries for each business indicated on the attached statement of Section 199A items. How many K-1 entries should I create (two, eight, or sixteen)?

One of the eight LLCs is the principal company which owns and manages the others, which are listed as "Rent - A Single Member LLC" and one "Passthrough" LLC. None of the child corporations detail an individual EIN.

My best guess is to create eight separate K-1 entries in TurboTax and try to reverse engineer the information I have into eight separate 1120S forms. Or should I just create one entry for ordinary income and one entry for rental income and create two Section 199A sums from all associated businesses for Box 17 Codes V, W, and X?

[ab970]

I've re-read TT's advice several times now:

Since your K-1 reports amounts in more than just one of boxes 1, 2, or 3, the S corporation is involved in more than one type of activity. You should treat each activity separately in TurboTax.

Enter the business activity amount, box 1, on one K-1.
Enter the real estate rental activity amount, box 2, on another K-1.
Enter the other rental activity amount, box 3, on a third K-1.

This will allow TurboTax to properly track your loss carryovers. This is especially important if you ever sell your interest. For all items below Box 3, look for a statement attached to your K-1 to help you allocate these values to the proper activity.

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I am moving forward with two TT K-1 entries for my 1120S. I have been able to separate out the values most boxes into their ordinary business income and net rental real estate income counterparts so far, except for Box 16 Code D - Property Distributions. I don't seem to have the information to correlate this value with the activities described in the attached statement - should I copy this value on both entries?

[DavidS127 · Accepted solution]

You'll need a separate K-1 for each entity reporting Section 199A income on the K-1 you received, and if an entity has multiple boxes (box 1, box 2, box 3) you'll need a separate K-1 for each entity and type of box.

If you can't deduce the "split" of your box 16 code D amount, you'll have to contact the preparer of the K-1 for that information.

[Dnicol2989]

Ok, I understand I need to enter the K-1 twice once for box #1 and once for box #2. What about the stuff in the other boxes? Do I enter all of it on both of the K-1’s entered or just one of them? And if it I’d just one of them which one is best?

thanks

[DianeW777]

No, you do not enter the rest of the information in both K1 entries in TurboTax. All of the other boxes that have an entry should be entered into only one of the K1s.  I suggest you enter all in the K1 that has the Box 1 information.  For the second K1 entry use it only for the amount in Box 2.

This keeps the income or loss from Rental Real Estate separate and identifiable from the other income. It has special rules if a loss occurs.

• IRS Publication 925 (Passive Activity Rules)

@Dnicol2989 

[Dnicol2989]

Thank!

[dbeemoney]

Another response indicated you need to know which boxes apply to which type of income, Box 1 or Box 2. You then report each box with the correct K-1.  Does anyone know which boxes apply to Box 1 and which apply to Box 2? Or, can you ignore that and just put all of the boxes with the K-1 that has Box 1, and on the second K-1 with a Box 2, no other boxes are filled?

[RobertB4444]

Yes, the first K-1 will have the box 1 information and any other boxes with information.  The second K-1 will have only the amount that is in box 2.

@dbeemoney 

[csn2020]

So do the amounts on the 7203 forms need to be divided up for each K-1 also?

[Mike9241]

2 k-1s one for box 1 and 1 for box 2. but only one 7203 which needs to reflect all entries on the k-1 that affect your basis.