Is a separate 1065 K-1 worksheet really required for each passthrough listed in Box 20, Code Z?

[davetodd11]

One of my clients has a 1065 K-1 with multiple pass through 25 different entities listed in the Box 20, Code Z notes.  The Section D1 smart worksheet on the K-1 worksheet indicates that I need to add each of these pass throughs on a separate K-1 entry worksheet.  Is this really the only way to account for this info, or can I list them elsewhere and just put the totals in the K-1 worksheet?

In addition, 5 of the 25 pass through entities also have both Ordinary Income in Box 1 and Rental Income in Box 2, which the K-1 worksheet also indicates would need to be split out on separate worksheets, so this is sounding like a monumental task and may cost the client more for my services than they'll save with a QBI deduction.  This seems insane to me to have to generate 30 K-1 worksheets just to record a client's activity for 1 K-1, so I'm hoping someone out there can just point me to an easy solution that I am overlooking.

[Accountant-Man]

To answer the second question, yes, PS needs separate K-1 worksheets for different types of income on the same physical K-1: 1) Ordinary, 2) Rental real estate, 3) Other rentals.

PS ain't as high falutin' as dose softwares.

Firstly, in order to PROPERLY input the SEPARATE ACTIVITIES which are owned by an entity so that their accounting can be done separately, specifically in matters of sales of an activity for purposes of the passive loss rules: Yes, unless you don't care about each separate activity.

Iffen I 'member correctly, software like Lacerta and Slow Tax (Fasttax) had sub-schedules which attached to the lead K-1 worksheet. Just click a button and get another activity under the Momma K-1

Not so for PS.

[sjrcpa]

Are the dollars material?

Are they PTPs?

Do they all add up to an unallowable loss?

[davetodd11]

No, the dollars aren't material.  The K-1 is not for a PTP.  The entities listed in the Section 199A Information notes don't specifically indicate, but I'm assuming they are not PTPs either.  They all add up to an immaterial income ($2,369).

I'm wondering if an acceptable workaround would be to list each entity and the applicable dollar amount in a supporting statement on each line in Section D1 (Statement A).  This would seem to provide the desired level of granularity and generate only one K-1 worksheet, instead of 25.  Thoughts?

For the Net Rental Real Estate Income (Loss) amount, I did go ahead and generate a second K-1 worksheet which just has the partnership name/EIN and the rental income amount.  This at least got rid of the error PS gave me when I had both that and Ordinary Business Income listed on the same worksheet.

[TaxGuyBill]

If I remember correctly, if you report them as separate activities, then you can claim the 'release' of the passive loss carryover for a specific rental when that specific property is sold.  If you do not report them separately, you can't do that, and the passive loss carryovers are not 'released' until you dispose of the ENTIRE activity (ALL rentals, or the Partnership Interest is disposed).