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Where do I reduce a partner's SE income on Form 1040 k-1 wks for sec. 754 depreciation?

david3
Level 5

How do I reduce a partner's SE income on his Form 1040 k-1 wks for sec. 754 depreciation?

Thanks.

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4 Replies 4
Terry53029
Level 11
Level 11

Report the adjustments on an attached statement to Schedule K-1 using the codes for Other Income or Other Deductions, line 11 or 13

david3
Level 5

Thank you for your help with this.

The information is already in Other Deductions on the K-1 wks. However, that doesn't reduce the SE income. 

My question is how to actually reduce the SE income in PS for the Sec. 754 deduction. The taxable income is already reduced for this so I can't report it as UPE since this will reduce taxable income again for the Sec. 754 depreciation. 

I finally just changed the number on line 14 of the K-1 wks that was imported from the client's 1065. Not sure if that will trigger a problem when the IRS matches the K-1 to the 1040.

Thank you.

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Terry53029
Level 11
Level 11
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david3
Level 5

Thank you for your help. 

I saw that before posting my question. It is instructions for Lacerte.

The program does reduce taxable income for the sec. 754 deduction. But it doesn't reduce SE income on line 14 of the K-1 worksheet. 

No instructions seem to address how to reduce SE income. So I changed the number on line 14 of the K-1 wks.

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