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Common questions about partnership passthrough K-1s in Lacerte

SOLVEDby IntuitLacerte Tax26Updated July 19, 2022

Below, you'll find answers to frequently asked questions about passthrough K-1s in Lacerte:

  1. Go to Screen 22, Other Schedule K items.
  2. Scroll down to the Deductions section.
  3. In the Other Deductions (Ctrl+E) field, press Ctrl+E.
  4. Select the desired code from the K-1 Code (Ctrl+T) dropdown menu.
  5. Enter a Description.
    • If you don't enter a description, the item won't be available on Screen 29, Special Allocations. The description will appear in blue text on Screen 29.
  6. Enter the Federal amount, then a Description, St. if diff., or State if applicable.
  7. Select the Ins (insert) button and repeat steps 4–7 if you wish to enter more items.
  8. Select OK after entering all items.
  9. Make sure the amounts on the Schedule K (Form 1065) and Schedule K-1, Line 13 are correct.
  10. Make sure the allocations to the partners on the Schedule K-1, Box 13 are correct. If you need to change any of the amounts:
    1. Go to Screen 29, Special Allocations.
    2. Select the Deductions (Sch. K-1, Boxes 12–13) folder.
      • If you don't see this folder under the Section view, revisit steps 3–6 above. If entered correctly, you should see the Deductions folder.
    3. Select Other Deductions, Other Deductions (Sch. K), then your deduction's description (in blue text).
    4. You'll see the total amount available for special allocation under the Allocations (29) window.
    5. Enter the desired amount for the applicable partners in the Allocation Amount column.

If the Other Deductions are from a passthrough entity:

  1. Go to Screen 23, Passthrough K-1's.
  2. Select Other Deductions(13) in the Section view.
  3. Go to Other deductions (Ctrl+E).
  4. Repeat steps 1–10 above.
  1. Go to Screen 22, Other Schedule K items.
  2. In the Other income (loss) (Ctrl+E) field, press Ctrl+E.
  3. Select the desired code from the K-1 Code (Ctrl+T) dropdown menu.
  4. Enter a Description.
    • If you don't enter a description, the item won't be available on Screen 29, Special Allocations. The description will appear in blue text on Screen 29.
  5. Enter the Federal amount (enter loss as a negative amount), then a Description, St. if diff., or State if applicable.
  6. Select the Ins (insert) button and repeat steps 4–7 if you wish to enter more items.
  7. Select OK.
  8. Make sure the amounts on the Schedule K (Form 1065) and Schedule K-1, Line 11 are correct.
  9. Make sure the allocations to the partners on the Schedule K-1, Box 11 are correct. If you need to allocate the amounts differently than the Profit Sharing Percentage:
    1. Go to Screen 29, Special Allocations.
    2. Select the Income (Sch. K-1, Boxes 1–11) folder.
      • If you don't see this folder under the Section view, revisit steps 3–6 above. If entered correctly, you should see the Income folder.
    3. Select the Other Income folder, Other Icnome (Sch. K-1), then your income description (in blue text).
    4. You'll see the total amount available for special allocation under the Allocations (29) window.
    5. Enter the desired amount for the applicable partners in the Allocation Amount column.

If the Other Income (Loss) is from a passthrough entity:

  1. Go to Screen 23, Passthrough K-1's.
  2. Scroll to section Income (Loss) (1–11).
  3. In the Other Income (loss) (11) (Ctrl.+E) field, repeat the steps above.

Entering cash charitable contributions:

  1. Go to Screen 22, Other Schedule K Items.
  2. Scroll down to the Deductions section.
  3. Under the Charitable Contributions, Cash subsection, enter your charitable contributions in the 60% limitation or 30% limitation field.

Enter noncash charitable contributions:

Noncash contributions are located on Screen 50, Noncash Contributions, but you can adjust them in Screen 22, Other Schedule K Items.

Depending on when the noncash contributions were made, they may be subject to the 50% and 30% adjusted gross income (AGI) limits. Limitations apply at the partner's level.

  1. Go to Screen 50, Noncash Contributions (8283).
  2. Enter any applicable items.

Adjusting noncash contributions

(adjustments appear on Schedule K, but not on Form 8283):

  1. Go to Screen 22, Other Schedule K Items.
  2. Under the Section view, select Deductions.
  3. Under the Charitable Contributions, Noncash subsection, enter your noncash charitable contribution in the following fields:
    • 50% limitation [A]
    • 30% limitation [A]
    • 30% capital gain property [A]
    • 20% capital gain property [A]

You can find additional inputs on Screen 23, Passthrough K-1's. Charitable contributions flow to the Schedule K/K-1 to line 13A.

  1. Go to Screen 23, Passthrough K-1's.
  2. Under the Section view, select Other Deductions (13).
  3. Under the Charitable Contributions section, enter your cash or noncash contributions.
    • For cash:
      • 50% limitation (A)
      • 30% limitation (B)
    • For noncash:
      • 50% limitation (C)
      • 30% limitation (D)
      • 30% capital gain property (E)
      • 20% capital gain property (F)

Schedule M-1 and Schedule M-2 considerations

Lacerte doesn't automatically adjust the difference between item cost/basis and item fair market value (FMV).

The FMV appears on Schedule K and flows through Schedule M-1 and Schedule M-2 into the "Partner Capital Accounts" balance sheet.

If the contributed item was carried on the books at cost, make a manual M-1 or M-2 adjustment to make Schedule M-1, Line 1 conform to "Book income," or Schedule M-2, Line 9 conform to "Ending Capital Accounts."

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