Understanding partnership Schedule K-1, box 13 codes for individual returns in Lacerte

This article will assist you with understanding input codes for a partnership Schedule K-1, box 13 for an individual return on Screen 20.1 in Lacerte.

For K-1 codes without input in the K-1 input screen: These amounts may require additional computations before being entered in the Separately Stated Income and Deductions section.

Select the deduction codes below for more information.

Table of contents:

Code A

Enter the charitable cash contributions from Schedule K-1 subject to the 60% AGI limitation. The program carries this amount to the cash contribution line on Schedule A.

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Code B

Enter the charitable cash contributions from Schedule K-1 subject to the 30% AGI limitation. The program carries this amount to the cash contribution line on Schedule A.

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Code C

Enter the charitable noncash contributions from Schedule K-1 subject to the 60% AGI limitation. If total noncash contributions reported in this field and elsewhere exceed $500, the program reports these amounts on Form 8283. Otherwise, the program reports them directly on Schedule A.

You must enter noncash contributions in excess of $5,000 directly into the Form 8283 input section on Screen 26, Noncash Contributions.

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Code D

Enter the charitable noncash contributions from Schedule K-1 subject to the 30% AGI limitation. If total noncash contributions reported in this field and elsewhere exceed $500, the program reports these amounts on Form 8283. Otherwise, the program reports them directly on Schedule A.

You must enter noncash contributions in excess of $5,000 directly into the Form 8283 input section on Screen 26, Noncash Contributions.

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Code E

Enter the charitable contributions of capital gain property from Schedule K-1 subject to the 30% AGI limitation. If total noncash contributions reported in this field and elsewhere exceed $500, the program reports these amounts on Form 8283. Otherwise, the program reports them directly on Schedule A.

You must enter noncash contributions in excess of $5,000 directly into the Form 8283 input section on Screen 26, Noncash Contributions.

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Code F

Enter the charitable contributions of capital gain property from Schedule K-1 subject to the 20% AGI limitation. If total noncash contributions reported in this field and elsewhere exceed $500, the program reports these amounts on Form 8283. Otherwise, the program reports them directly on Schedule A.

You must enter noncash contributions in excess of $5,000 directly into the Form 8283 input section on Screen 26, Noncash Contributions.

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Code G

Enter the charitable cash contributions from Schedule K-1 subject to the 100% AGI limitation (for disaster relief), or noncash conservation contributions for qualified farmers or ranchers subject to the 100% limit.  If the qualified farmer or rancher box isn't checked, the contributions are treated as disaster relief contributions. If the qualified farmer or rancher box is checked, the contributions are treated as noncash conservation contributions. The program carries this amount to the cash contribution line on Schedule A.

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Code I

Enter the deductions related to royalty income that was reported to you. This amount will be reported on Schedule E, page 1.

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Code K

Enter the deductions related to portfolio income from Schedule K-1. The program carries the deduction to Miscellaneous Deductions Subject to 2% AGI Limitation on Schedule A. The program uses the allowed portion to calculate investment interest expense on Form 4952, if applicable.

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Code L

Enter the deductions related to portfolio income from Schedule K-1. The program carries the deduction to Other Miscellaneous Deductions (not subject to the 2% AGI limitation) on Schedule A. The program also uses the amount to calculate investment interest expense on Form 4952, if applicable.

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Code M

Enter the amount of self-employed health insurance premiums paid by or on behalf of the partner. The allowable deduction is limited to the self-employment income entered in the Net Earnings from Self-Employment field (Screen 20, code 4) (reduced by depletion and section 179) plus other self-employment income reported on this return.

For this calculation, the program calculates self-employment income based on the total for the return, not on a business-by-business basis. For other limitations, see a complete discussion in Screen 24, Adjustments to Income within the SE Health Insurance Premiums (code 16) field using the F1 help feature.

The program reports the excess amount not qualifying for deduction on Form 1040 as an itemized deduction on Schedule A.

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Code N

Educational assistance benefits. Deduct your educational assistance benefits on a separate line of Schedule E, line 28, up to the $5,250 limitation. If your benefits exceed $5,250, you may be able to use the excess amount on Form 8863 to figure the education credits.

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Code O

Enter the dependent care benefits received from the partnership.

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Code P

Preproductive period expenses. You may be eligible to elect to deduct these expenses currently or capitalize them under section 263A. See Pub. 225, Farmer's Tax Guide, and Regulations section 1.263A-4.

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Code Q

Enter the amount of commercial revitalization zone deduction. Amounts entered in this code flow to Form 8582, line 2a.

The amount of loss attributable to the commercial revitalization deduction is not required to meet the active participation requirements of the special allowance and is not subjected to the MAGI phase-out of the special allowance.

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Code R

Pensions and IRAs. Payments made on your behalf to an IRA, qualified plan, simplified employee pension (SEP), or a SIMPLE IRA plan. See Schedule 1 instructions to figure your IRA deduction. Enter payments made to a qualified plan, SEP, or SIMPLE IRA plan on Schedule 1 line 16.

If the payments to a qualified plan were to a defined benefit plan, the partnership should give you a statement showing the amount of the benefit accrued for the current tax year.

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Code S

Reforestation expense deduction. Reforestation expense deduction. The partnership will provide a statement that describes the qualified timber property for these reforestation expenses. Generally, the expense deduction is limited to $10,000 ($5,000 if married filing separately) for each qualified timber property, including your distributive share of the partnership’s expense and any reforestation expenses you separately paid or incurred during the tax year.

Additional information:

• If you did not materially participate in the activity, use Form 8582 to determine how much of these expenses can be reported on Schedule E (Form 1040), line 28.
• If you materially participated in the reforestation activity, report the deduction on line 28, column (h), of Schedule E (Form 1040).

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Code W

Other deductions. There's no input code available for code W due to the variety of information that can be reported here. Amounts with this code may include, but aren't limited to:

• Itemized deductions (Form 1040 filers enter on Schedule A Form 1040).
• Soil and water conservation expenditures and endangered species recovery expenditures.
  • See section 175 for limitations on the amount you're allowed to deduct.
• Expenditures for the removal of architectural and transportation barriers to the elderly and disabled that the partnership elected to treat as a current expense.
  • The deductions are limited by section 190(c) to $15,000 per year from all sources.
• Interest expense allocated to debt-financed distributions.
  • The manner in which you report such interest expense depends on your use of the distributed debt proceeds. If the proceeds were used in a trade or business activity, report the interest on line 28 of Schedule E (Form 1040). In column (a) enter the name of the partnership and “interest expense.” If you materially participated in the trade or business activity, enter the amount of interest expense in column (h). If you didn't materially participate in the activity, follow the instructions for Form 8582 to determine the amount of interest expense you can report in column (f). See page 3 in the Partner’s Schedule K-1 instructions for a definition of material participation. If the proceeds were used in an investment activity, enter the interest on Form 4952. If the proceeds are used for personal purposes, the interest is generally not deductible.
• Interest paid or accrued on debt properly allocable to your share of a working interest in any oil or gas property (if your liability isn't limited).
  • If you didn't materially participate in the oil or gas activity, this interest is investment interest reportable as described on page 9 of the Partner’s Schedule K-1 instructions; otherwise, it's trade or business interest. If you didn't materially participate in the oil or gas activity, this interest is investment interest expense and should be reported on Form 4952. If you materially participated in the activity, report the interest on line 28 of Schedule E (Form 1040). On a separate line, enter “interest expense” and the name of the partnership in column (a) and the amount in column (h).
• Penalty on early withdrawal of savings.
  • Report this amount on Form 1040, line 30.
• Film and television production expenses.
  • The partnership will provide a statement that describes the film or television production generating these expenses. Generally, if the aggregate cost of the production exceeds $15 million, you aren't entitled to the deduction. The limitation is $20 million for productions in certain areas (see section 181 for details). If you didn't materially participate in the activity, use Form 8582 to determine the amount that can be reported on Schedule E (Form 1040), line 28, column (f). If you materially participated in the production activity, report the deduction on Schedule E (Form 1040), line 28, column (h). The partnership will give you a description and the amount of your share for each of these items.

For more information on how to input entries for code W, see here.

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