How to export Schedule K-1s between tax returns in Lacerte

You can export a completed Schedule K-1 and import the data into the recipient's tax return using Lacerte.

Before you start

• The recipient name and SSN/EIN must match exactly for the export or import to work.
• The K-1 Data Path should be the same for all modules.
  • You can check this by going to the Settings menu and choosing Options. Then, select the Setup tab and look for the K1 Data Path.
• The Not a passive activity and Actively participated in real estate checkboxes will not mark during import or export. 
  • The program doesn't have input for the partner level, so these must be marked in the Individual module.
• Many Schedule K-1 income and expense items are transferred to the input screen to simplify entries on the appropriate tax return.
• Any item that needs to be reviewed prints on a supplemental information page, but you should review all items for accuracy and correct treatment on the tax return, particularly those on the supplemental information pages.

Table of contents:

Information that will be exported

• Click on the return type you’re exporting below to see a list of what exports:
  • Partnership
  • S corporation
  • Fiduciary
• The Schedule K-1 import feature doesn't work for fiscal year returns.
• A grantor type trust doesn't produce a Schedule K-1 and therefore can't be exported.
• Most state K-1 information will not import, so amounts from state Schedule K-1s or passthrough summaries must be entered manually.
  • For the Partnership module, certain line items will import the sourcing for California.

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Exporting from a Partnership return

1. Open the client file.
2. Go to Screen 32.1, Schedule K-1 Miscellaneous.
3. Select the applicable Partner name from the left navigation menu.
4. Under the K-1 Export section, check the Export partner K-1 data box.
5. Repeat steps 3 and 4 for each partner you plan on exporting.
6. From the Tools menu, choose K-1 Data Export.
7. Review the list of partners being exported.
   • If you need to make changes return to screen 32.1 and make sure the correct partners are marked for export.
8. Click Export to start the export.
9. Click OK once it's complete.
   • Once the export has been completed within the business return, any changes to the K-1 will trigger Lacerte to prompt you to export the K-1 again.
10. Close the partnership return.
11. Open the return for the recipient.
    • This could be a 1040, 1120, 1120S, 1041, or another 1065.
12. You will be prompted to review the Sch K-1 Data Import screen. If the data is correct, click Accept Data.
13. Lacerte will ask you to confirm the overwrite of the existing data. Click Yes to continue importing the data, or click No to cancel.
14. Click OK to continue to the tax return Details tab.

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Exporting from a S Corporation return

1. Open the client return.
2. Go to Screen 36, Schedule K-1 Misc./Schedule B-1.
3. Choose the applicable Shareholder name from the left navigation menu.
4. Under the K-1 Export section, check the Export shareholder K-1 data box.
5. Repeat steps 3 and 4 for each shareholder you plan on exporting.
6. From the Tools menu, select K-1 Data Export.
7. Review the list of shareholders being exported.
   • If you need to make changes return to Screen 36 and make sure the correct shareholders are marked for export.
8. Click Export to start the export.
9. Click OK once the export is complete.
   • Once the export has been completed within the business return, any changes to the K-1 will trigger Lacerte to prompt you to export the K-1 again.
10. Close the S-Corporate return.
11. Open the return for the recipient.
    • This could be a 1040, or 1041.
12. You will be prompted to review the Sch K-1 Data Import screen. If the data is correct, click Accept Data.
13. Lacerte will ask you to confirm the overwrite of the existing data. Click Yes to continue importing the data, or click No to cancel.
14. Click OK to continue to the tax return Details tab.

Additional information

• Separately stated details from the disposition of assets with prior Section 179 expense transfer to the Dispositions screen.
• PPP loans will export to an individual return as box 18B, other tax-exempt income. Lacerte will automatically create a federal basis adjustment for this amount. Make sure to use the State, if different column to report any adjustments for nonconforming states.

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Exporting from a Fiduciary return

1. Open the client return.
2. Go to Screen 43, Schedule K-1 Overrides / Misc.
3. From the Beneficiary section on the left click on the beneficiary name.
4. Under K-1 Export check the Export beneficiary K-1 data box.
5. Repeat steps 3 and 4 for each beneficiary you plan on exporting.
6. From the Tools menu choose K-1 Data Export.
7. Review the list of beneficiaries being exported.
   • If you need to make changes return to screen 43 and make sure the correct beneficiaries are marked for export.
8. Click Export to start the export.
9. Click OK once it's complete.
   • Once the export has been completed within the business return, any changes to the K-1 will trigger Lacerte to prompt you to export the K-1 again.
10. Close the fiduciary return.
11. Open the return for the recipient.
    • This could be a 1040, 1065, 1120, 1020-S, or another 1041.
12. You will be prompted to review the Sch K-1 Data Import screen. If the data is correct click on Accept Data.
13. Lacerte will ask you to confirm the overwrite of the existing data. Click Yes to continue importing the data, click No to cancel.
14. Click OK to continue to the tax return Details tab.

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What if the export didn't work?

There are some situations where the data may not transfer. Check the following items to make sure everything is set up correctly, or to make necessary adjustments:

• Make sure the Schedule K-1 has information to export. If there aren't any income or loss items the K-1 will not export.
• Make sure the Social Security Number (SSN) of the partner(s), shareholder(s), or beneficiary(s) match the SSN for the taxpayer or spouse in the Individual module.
• On the Partnership Information screen, make sure the Type of Entity is set to Individual.
• Check the dates of the return. If the return is on a fiscal year, the K-1 export won't work.
• If you've reviewed all other information and the information still isn't appearing in the Individual module, check to see if the return has been split via the Split Joint Return feature in the Tools menu.
  • If it has, Lacerte will export the K-1 information to the single/split return as opposed to the joint return. You may need to back up the MFS return and delete it in order to export the K-1 data to the MFJ return.
• If Schedule K-1 activities already exist within Screen 20, Passthrough K-1's of the Individual module, or the SSN is correct and no import box appeared, enter the number of the specific K-1 into the entity's return as the activity number:
  • Partnership: Screen 32, code 22 - Number of K-1 Activity in 1040 [O]
  • S- Corporation: Screen 36, code 9 - Number of K-1 Activity in 1040 [O]
  • Fiduciary: Screen 43, code 116 - Number of K-1 Activity in 1040 [O]
• Grantor Trusts do not generate a K-1 and cannot be exported.

Examples

• If the K-1 corresponded to the second partnership in Screen 20 of the Individual return, enter a 2 in the Partnership return, Screen 32, code 22 for the specific partner.
• If there are no other K-1s currently present in Screen 20, enter a 1 in the Number of K-1 Activity in 1040 field in the appropriate business return.
• If a taxpayer and spouse each have a K-1 from the same entity, enter consecutive numbers (e.g. 1 and 2, or 2 and 3 if there is another K-1 already present in Screen 20) in the Number of K-1 Activity in 1040 field in the appropriate business return.

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How do I resolve a K-1 indexing file error?

Attempting to do a K-1 transfer from any module to Individual will result in the following error:

"K-1 Transfer is unable to obtain access to the K-1 indexing file.  The file is currently in use.  Please try again later."

This error will generate if there are K-1s waiting to be imported (navigating within the client file),  or if there's corruption within the K-1 folder.

Follow these steps to clear pending K-1s:

1. Close the error.
2. From the Client menu, select Tax Type and choose Individual.
3. Check whether any K-1s need to be transferred.
   • If you're using a network, do this on each workstation computer.

Follow these steps if the above steps don't work:

1. From the Settings menu, select Options.
2. Select the Setup tab.
3. Note the Shared K1 Path.
4. Close Lacerte on all workstations.
5. Browse to the Shared K1 Path from step 3.
6. Go back one folder.
7. Right-click the K1 folder and choose Rename.
8. Rename the folder to K1-old and hit Enter.
   • If an error generates when you try to rename the folder, one of the workstations on the network may not have properly released the files after a previous K-1 transfer. In order to release the files, you'll need to restart all of the computers on the network. Once all computers have finished restarting, you may attempt to transfer the K-1 again.
9. Open the program and attempt the K-1 transfer again.
   • If the error persists, the server may be keeping the files open. Contact your IT professional for assistance with restarting your server.

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