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Why are amounts printing on a 1065 Schedule K-1, box 16?

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Intuit

Why are amounts printing on a 1065 Schedule K-1, box 16?

Starting in tax year 2020, the IRS introduced new partnership box 16 codes AA through AI. These codes report gross receipts and base erosion tax benefits under Regulations 1.59A-7(e)(2) (Base Erosion Tax 8991).

  • Business entity partners (corporations, LLCs, and partnerships) will generate multiple codes for current year and prior year gross receipts, as well as base erosion tax information.

These items are for informational purposes to help the K-1 recipient complete their tax return, and they do not indicate that any foreign income or activity is present on the partnership's return.

These amounts will be populated automatically based on the Form 1065 Schedule K-1 instructions. They can be specially allocated to the partners.

To suppress or override the amounts in Lacerte:

To override code AA, current year gross receipts:

  1. Go to Screen 22, Other Schedule K Items.
  2. Scroll down to the Foreign Transactions section.
  3. Enter an amount in Gross receipts per Reg. 1.59A-7(e)(2) [O]. Enter -1 to set the amount to zero.

Codes AB, AC, and AD represent three preceding years' gross receipts. The totals for all partners are based on your entries or proforma'd amounts on Screen 5, Other Information (Schedule B). To override these amounts for a specific partner:

  1. Go to Screen 32.1, Schedule K-1 Misc.
  2. Scroll down to the Gross Receipts per Regulations 1.59A-7(e)(2) [O] (Partnership, Corp, or LLC Partners Only) section.
  3. Enter the amounts for the first, second, and third preceding tax year. Enter -1 to set the amount to zero.

To suppress or override the amounts in ProConnect:

Code AA, current year gross receipts:

  1. On the left-side menu, select Schedule K.
  2. Click on Other Schedule K Items, then select the Other Schedule K Items screen.
  3. At the top of the input area, select the Less Common Scenarios section.
  4. Enter an amount in Gross receipts per Reg. 1.59A-7(e)(2) [Override]. Enter -1 to set the amount to zero.

Codes AB, AC, and AD represent three preceding years' gross receipts. The totals for all partners are based on your entries or proforma'd amounts on the Other Information (Schedule B) screen. To override these amounts for a specific partner:

  1. On the left-side menu, select Schedule K-1.
  2. Click on the Schedule K-1 Miscellaneous screen.
  3. Scroll down to the Gross Receipts per Regulations 1.59A-7(e)(2) [Override] (Partnership, Corp, or LLC Partners Only) section.
  4. Enter the amounts for the first, second, and third preceding tax year. Enter -1 to set the amount to zero.

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