entering 1065 K-1, line 20, code AG on 1040

[Sue928]

There is an amount on the K-1 (1065), line 20, code AG, gross receipts for section 448(c). According to final review, this needs to be manually entered. I have no idea where. The K-1 belongs to an individual. The amount reported ($46239) represents gross sales less returns for the individuals percentage of partnership. Does it need to be reported on form 1040 somewhere.

[dd4vols]

on the K-1 WKS Partnerships, scroll down to line 20. click on the First blank and select AG..... then go over on that same line 20, and put the amount from the k-1 into the amount column.  Thats all you have to do......Then, let the software do it's magic.

[Terry53029]

In ProSeries Pro there is no "magic" on the K1 worksheet, line 20, code AG. You have to manually enter any amounts if section 448 C applies to your clients. Basically section 448 C says you can't use the cash method of accounting unless your gross receipts are under $25,000,000. If you want to read more, here is a link:  https://www.thetaxadviser.com/issues/2019/aug/small-taxpayer-gross-receipts-rules.html

[Sue928]

I read that article before I posted. I assume that the $25,000,000 applies to the individual and not the partnership that the K-1 came from. The individual is a cash basis taxpayer. The individual's total income from all sources has to stay under the threshold. In this case, it does. So, does that mean that the gross receipts reported as code AG on K-1 does not have to appear anywhere on the 1040? The only income that appears on the 1040 is the income reported on   K-1, line 1 or 2.

[Terry53029]

That is the way I handle it. I have no clients in that income range, and when I see an amount on line 20 AG that is the only place I record it on the K1

[bradycmb]

On my K-1 statement, it has 3 years of figures with the code AG for line 20:
Gross receipts for 2019-$1,634
Gross receipts for 2018-$1,103
Gross receipts for 2017-$1,160
What do I do with these figures

[jw5]

Did you ever get an answer to this? I'm filing late and have run into the same problem.

Thanks.

[Sue928]

Yes. I did get an answer from Terry 53079. In my case the taxpayer was a cash basis taxpayer and all gross income was less than $25,000,000. Therefore, the amount on K-1, line 20, code AG does NOT appear on the individual's tax return. AG is only applicable if the taxpayer is cash basis and gross income is over $25,000,00. None of my clients fall in that bracket.

[jw5]

Thank you so much!!!

[dvisions]

So to verify, you added up the total amount of the 3 years' worth of gross receipts and just recorded the total for reporting purposes, but the amount was not pass through to the taxpayer's 1040 (unaffected)?

*It looks like for 2021 the code will now be AC rather than AG.

[Kas0430]

I have the same situation with three years totaling $1,229,460.  So, if I understand this, I just put it on the K-1 under AG.  I don't manually put it anywhere on the 1040, so no tax.  Is that correct?

[dvisions]

Based on what Sue928 said, that's all I did since gross receipts are less than 25,000,000.  No tax was added via 1040.

[Richard1951]

i have 2 years of ag on my k-1 

do i enter both years