Turbotax Premier, K-1s and Passive Activity Losses

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Turbotax Premier, K-1s and Passive Activity Losses

Postby Scorpion » Sun Feb 10, 2013 11:21 pm

I have done my taxes with TurboTax Deluxe for many years. In recent years, I have started receiving (and later investing in) shares in various real estate partnerships. I have dutifully entered the K-1 info into TT Deluxe every year. I worry though, that when things start to get more complicated with respect to passive activity losses, earning passive income and recognizing the PALs pro rata across the various projects, etc., Deluxe won’t be able to handle it. Does anyone know if Premier is any better for this purpose? I am reluctant to upgrade, as I understand TT makes it tough to downgrade later.
Thanks!
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Re: Turbotax Premier, K-1s and Passive Activity Losses

Postby StoneReader » Mon Feb 11, 2013 10:12 am

I had the same worries that you did about K-1s and Passive activity with regards to Turbotax. The free version works just as well as the Premier one. In fact, I find the free one is more transparent and actually easier to work with because the Premier version overlays a lot of layers purportedly to make things "easier". But these additional layers only makes things murkier and harder to fix if you run into problems.
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Re: Turbotax Premier, K-1s and Passive Activity Losses

Postby Scorpion » Mon Feb 18, 2013 10:20 pm

Thanks - I didn't shell out for Premier.
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Re: Turbotax Premier, K-1s and Passive Activity Losses

Postby serbeer » Tue Feb 19, 2013 2:27 pm

Note that if you K-1s are for REITs held in IRA accounts (as it should be), you can simply ignore them unless amounts they bring in are very high.

I used to get them for commodity funds when I held them in IRA, and that's exactly what I did. I think I vaguely recall that per my research there was some K-1 distribution limit over which they must not be ignored even in IRA accounts, but this limit was pretty high, nowhere close to what I was getting in K1s.

Not a precise advice but the best I can give off the top of my head.
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Re: Turbotax Premier, K-1s and Passive Activity Losses

Postby pshonore » Tue Feb 19, 2013 2:35 pm

The limit for UBTI (NOT distributions) is $1k if thats what you're asking. Most Commodity funds don't generate UBTI but it never hurts to check.
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