Turbo Tax made 2 k-1s out of 1 imported file

Upon noticing that box 1 had a number ($4) and box 2 had a number ($0), Turbo Tax told me it had to create a separate K-1 internally to report this. Huh? What's the principle here and is a $0 in box 2 equivalent to nothing in box 2? I'm not sure which box triggered the creation of the additional k-1, nor do I know which copy I should be entering all the other code information on.

I recall that H&R Block's proprietary tax office software did the same thing (separate K-1's) if there were both box 1 and box 2 amounts. Yes, a zero in this case would be equivalent to blank.

Other than maybe PTP's, I don't think it really makes a difference if you have one paper K-1 entered across multiple "virtual" K-1's in your software.

The import process is not meant to replace the preparer. Now that you've run the import, why don't you just take the paper version of the K-1 and use it to correct your imported version?

-Mark B.

Thanks, Mark. The issue seems to be that having that 0 in box 2 made the software think that there were multiple business in operation (and the printed form instructions do tell you to report them separately in that case) and this caused TT to split out box 1 from box 2 on separate k-1s.

TT kept all values/codes from the imported k-1 with the k-1 that recorded the $0box 2 amount. It did not seem logical to have a k-1 with, among other things, domestic production figures for a business with 0 income (although there probably is a scenario where that might happen), and it didn't change any other forms that inherited anything from any k-1, so I deleted the $0 figure, restored the box 1 business income value ($4) to the k-1 form that had the other amounts and codes already imported/entered, and deleted the internally generated k-1. This works for me, although it probably isn't how a CPA would do it. If you think my modfications are off the wall, let me know. Even though the amounts are irrelevant to my bottom line, I still like to know how to do things the "right" way.... or "a" right way. >

I really despise k-1s

Jo -

This happens because real estate activities have different rules than regular business rules. If your K-1 has rental real estate activities (k-1 line 2), then those activities should be reported separate form regular business activity (K-1 Line 1).I think most software out there has to separate them to limit losses properly.

Jay

Jay, I finally came to that conclusion too, but wasn't sure how to treat the rental income of $0. I decided to ignore it. It's not going to change my bottom line and it greatly confused the "real" k-1. Thanks.