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 Partnership Schedule K-1 Line 13 Codes T U and V in the Individual Module

Highlighted

Entering Partnership Schedule K-1 Line 13 Codes T U and V in the Individual Module

Description

Where do I report Partnership Schedule K-1, line 13, codes T, U, and/or V in the Individual module?

How do I enter the Domestic Production Activity Deduction information form a Partnership K-1 in the Individual module?

Solution

To enter line 13, codes T, U, and/or V:

  1. Go to Screen 20, Passthrough K-1s.
  2. Click on Partnership Information from the left navigation panel.
  3. Scroll down to the Line 13 - Other Deductions section.
  4. Locate the (T, U, V) All Domestic Production Activities Information subsection.
  5. Complete the applicable fields from the K-1 received for line 13, code T:
    1. Enter a 1 or 2 in, 1= apply small business simplified overall method, 2= simplified deduction method.
    2. Enter the Domestic production gross receipts.
    3. Enter the Gross Receipts from all sources.
    4. Enter the Cost of goods sold allocable to DPGR.
    5. Enter the Cost of goods sold from all sources.
    6. Enter the Total deductions and losses directly allocable to DPGR.
    7. Enter the Total deductions and losses directly allocable to non-DPGR class of income.
    8. Enter the Other deductions and losses not directly allocable to DPGR or another class of income.
    9. Enter the Form W-2 wages.
  6. Enter the (13U) Qualified production activities income.
  7. Enter the (13V) Employers W-2 wages.

    Note: A diagnostic will generate if both entries are not made in Steps 6 and 7.

Form 8903 instructions indicate that if you use the small business simplified overall method or the simplified deduction method, you must use it for all activities (i.e. Schedule C, Schedule F, and other K-1 activities).

Small business simplified overall method:

The amount entered in, Domestic Production Gross Receipts carries to Form 8903, line 1 and Lacerte will combine the following amounts and carry the total to Form 8903, line 4:

  • Cost of goods sold from all sources,
  • Total Deductions and Losses Directly Allocable to DPGR,
  • Total Deductions and Losses Directly Allocable to a non-DPGR class of income, and
  • Other Deductions and Losses Not Directly allocable to DPGR or Another Class of Income.

Also, if you elect to apply the small business simplified overall method, Lacerte aggregates the Domestic Production Gross Receipts with domestic production gross receipts from other trade or business activities, and divides that amount by the Gross Receipts From All Sources plus gross receipts from other trade or business activities. The resulting ratio is then applied to all trade or business deductions including the ones indicated below:

  • Cost of goods sold from all sources,
  • Total Deductions and Losses Directly Allocable to DPGR,
  • Total Deductions and Losses Directly Allocable to a Non-DPGR Class of Income, and
  • Other Deductions and Losses Not Directly Allocable to DPGR or Another Class of Income.

Simplified deduction or the Section 861 method:

Lacerte carries the Cost of goods sold allocable to DPGR, to Form 8903, line 2 and all other deductions are carried to Form 8903, line 3:

  • Total Deductions and Losses Directly Allocable to DPGR,
  • Total Deductions and Losses Directly Allocable to a non-DPGR class of income, and
  • Other Deductions and Losses Not Directly allocable to DPGR or Another Class of Income.

Was this helpful?

You must sign in to vote, reply, or post
Labels (2)