Welcome back! Ask questions, get answers, and join our large community of tax professionals.
cancel
Showing results for 
Search instead for 
Did you mean: 

Entering a 1065 K-1 and I have both Working Interest Depletion and Royalty interest depletion. Only see one set of boxes to input depletion. How do I enter both?

michelle5
Level 1

I need to know how to enter both Royalty and Working interest depletion in the 1065 K-1 screen box 20T

0 Cheers

This discussion has been locked. No new contributions can be made. You may start a new discussion here

1 Solution

Accepted Solutions
PhoebeRoberts
Level 11
Level 11

There is no good solution here. There are a variety of bad solutions.

1) Set up a separate K-1 for all of the royalty pieces, and fiddle with the basis so it comes out right.

2) Figure that Ep1 and Ep2 get the same tax treatment, and lump them all on one or the other.

3) Run all the royalty activity through as if it were held directly, and fiddle the basis so it comes out right.

4) Adjust the other royalty deducts to include depletion.

If your depletion isn't limited, and you've got no basis / passive / QBI / NIIT issues, and the amounts are immaterial, all of those are equally good / bad choices. If you have any of those issues, you'll want to do a side calculation to figure out what the right answer is, and then fiddle your Lacerte input to get that answer.

View solution in original post

0 Cheers
2 Comments 2
PhoebeRoberts
Level 11
Level 11

There is no good solution here. There are a variety of bad solutions.

1) Set up a separate K-1 for all of the royalty pieces, and fiddle with the basis so it comes out right.

2) Figure that Ep1 and Ep2 get the same tax treatment, and lump them all on one or the other.

3) Run all the royalty activity through as if it were held directly, and fiddle the basis so it comes out right.

4) Adjust the other royalty deducts to include depletion.

If your depletion isn't limited, and you've got no basis / passive / QBI / NIIT issues, and the amounts are immaterial, all of those are equally good / bad choices. If you have any of those issues, you'll want to do a side calculation to figure out what the right answer is, and then fiddle your Lacerte input to get that answer.

0 Cheers
sjrcpa
Level 15
:violin::violin:

Ex-AllStar
0 Cheers