Turbotax not handling K-1 Box 13 Code AE

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Topic Author
LookinAround
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Turbotax not handling K-1 Box 13 Code AE

Post by LookinAround »

I hate K-1’s!

I received my K-1. Box 13 Other Deductions shows two items
• Code H - Investment interest expense for $89
• Code AE - Deductions – portfolio income for $344

I enter the two codes and their $ values into TT's K-1 Box 13.
  • As soon as I add Code AE, Turbotax creates a new form K1P Addl Info to be completed
  • The K1P’s Box 13 only supports codes J, R, and W to ZZ. No place to enter info on Code AE
  • The K1P has an error field in section Code W to ZZ: Other Deductions. It prefills the $344 value into the Total box. It clearly wants info on Code AE
  • If I remove the Code AE entry from the K-1, TT removes the K1P and TT reports no errors
Problem seems Box 13 on the K1P doesn’t have anywhere to enter Code AE. And odd the K1P puts AE's $344 as the total value in section for Code W to ZZ. Anyone encounter this before? Is this a bug? How do I handle this situation?

Any help or insight much appreciated. Double click on thumbnail below

Image
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HueyLD
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Re: Turbotax not handling K-1 Box 13 Code AE

Post by HueyLD »

The answer is in the instructions for K-1 (Form 1065) as follows:

“ Code AE. Deductions—portfolio income.

Formerly deductible by individuals under section 67 subject to the 2% AGI floor. For taxpayers other than individuals, deduct amounts that are clearly and directly allocable to portfolio income (other than investment interest expense and section 212 expenses from a REMIC).”

In other words, this is no longer deductible for individuals because the misc. itemized deduction subject to the 2% AGI floor has been eliminated.
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Kagord
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Re: Turbotax not handling K-1 Box 13 Code AE

Post by Kagord »

I put in Box 8 Other * (enter description), as "Portfolio Income" with the amount in that worksheet. And I didn't enter on any other form.

This clears the pink, I have no idea if this is correct treatment in TurboTax, I think it's just the working papers, not transmitted, who knows. I haven't filed yet. Maybe other's can chime in.
Topic Author
LookinAround
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Re: Turbotax not handling K-1 Box 13 Code AE

Post by LookinAround »

HueyLD wrote: Thu Mar 28, 2024 6:21 pm The answer is in the instructions for K-1 (Form 1065) as follows:

“ Code AE. Deductions—portfolio income.

Formerly deductible by individuals under section 67 subject to the 2% AGI floor. For taxpayers other than individuals, deduct amounts that are clearly and directly allocable to portfolio income (other than investment interest expense and section 212 expenses from a REMIC).”

In other words, this is no longer deductible for individuals because the misc. itemized deduction subject to the 2% AGI floor has been eliminated.
Are you saying, just don't include code AE when filling out TT's K-1 Line 20 Other Information. That's where it appears on the paper K-1 I received
Last edited by LookinAround on Thu Mar 28, 2024 9:43 pm, edited 1 time in total.
Topic Author
LookinAround
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Re: Turbotax not handling K-1 Box 13 Code AE

Post by LookinAround »

Kagord wrote: Thu Mar 28, 2024 6:28 pm I put in Box 8 Other * (enter description), as "Portfolio Income" with the amount in that worksheet. And I didn't enter on any other form.

This clears the pink, I have no idea if this is correct treatment in TurboTax, I think it's just the working papers, not transmitted, who knows. I haven't filed yet. Maybe other's can chime in.
Sorry if I'm being dense but I don't see a Box 8. The K1P starts at Box 9c. And the K-1 is all line or letter enumerated. Line 20 on the K-1 is Other Information. Not sure where you meant
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Curly
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Re: Turbotax not handling K-1 Box 13 Code AE

Post by Curly »

I just checked and the software we use (Drake) doesn't have Box 13 code AE. It's not uncommon that we get client K-1s that have codes that don't line up with the software, and we are told by Drake that's because those codes aren't needed for a return. This aligns with what HueyLD said earlier.
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HueyLD
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Re: Turbotax not handling K-1 Box 13 Code AE

Post by HueyLD »

LookinAround wrote: Thu Mar 28, 2024 9:32 pm
HueyLD wrote: Thu Mar 28, 2024 6:21 pm The answer is in the instructions for K-1 (Form 1065) as follows:

“ Code AE. Deductions—portfolio income.

Formerly deductible by individuals under section 67 subject to the 2% AGI floor. For taxpayers other than individuals, deduct amounts that are clearly and directly allocable to portfolio income (other than investment interest expense and section 212 expenses from a REMIC).”

In other words, this is no longer deductible for individuals because the misc. itemized deduction subject to the 2% AGI floor has been eliminated.
Are you saying, just don't include code AE when filling out TT's K-1 Line 20 Other Information. That's where it appears on the paper K-1 I received
Correct.

This amount is no longer deductible for individual taxes. It is shown on a K-1 because if you are a business taxpayer, it is still deductible on your business tax return.
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LookinAround
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Re: Turbotax not handling K-1 Box 13 Code AE

Post by LookinAround »

Thanks to all. With your help, I was able to finish and efile my US and state tax returns this morning. Phew!

Done, till next year..... :sharebeer
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Kagord
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Re: Turbotax not handling K-1 Box 13 Code AE

Post by Kagord »

LookinAround wrote: Thu Mar 28, 2024 9:40 pm
Kagord wrote: Thu Mar 28, 2024 6:28 pm I put in Box 8 Other * (enter description), as "Portfolio Income" with the amount in that worksheet. And I didn't enter on any other form.

This clears the pink, I have no idea if this is correct treatment in TurboTax, I think it's just the working papers, not transmitted, who knows. I haven't filed yet. Maybe other's can chime in.
Sorry if I'm being dense but I don't see a Box 8. The K1P starts at Box 9c. And the K-1 is all line or letter enumerated. Line 20 on the K-1 is Other Information. Not sure where you meant
On the form image you posted in the original post, I put that in 8, at the bottom of the form.
4Health
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Re: Turbotax not handling K-1 Box 13 Code AE

Post by 4Health »

More about box 13R...How are people reporting box 13 when they have both a Keogh profit sharing and a cash balance account? In TurboTax, there is only an option to input a Keogh and select profit sharing/money plan/or qualified plan. My understanding is the cash balance is a qualified plan but there is no way to input that when inputting the K-1 info.
Topic Author
LookinAround
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Re: Turbotax not handling K-1 Box 13 Code AE

Post by LookinAround »

Kagord wrote: Fri Mar 29, 2024 7:50 am
LookinAround wrote: Thu Mar 28, 2024 9:40 pm
Kagord wrote: Thu Mar 28, 2024 6:28 pm I put in Box 8 Other * (enter description), as "Portfolio Income" with the amount in that worksheet. And I didn't enter on any other form.

This clears the pink, I have no idea if this is correct treatment in TurboTax, I think it's just the working papers, not transmitted, who knows. I haven't filed yet. Maybe other's can chime in.
Sorry if I'm being dense but I don't see a Box 8. The K1P starts at Box 9c. And the K-1 is all line or letter enumerated. Line 20 on the K-1 is Other Information. Not sure where you meant
On the form image you posted in the original post, I put that in 8, at the bottom of the form.
Found it. Thanks for clearing that up
Topic Author
LookinAround
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Re: Turbotax not handling K-1 Box 13 Code AE

Post by LookinAround »

Kagord wrote: Fri Mar 29, 2024 7:50 am
LookinAround wrote: Thu Mar 28, 2024 9:40 pm
Kagord wrote: Thu Mar 28, 2024 6:28 pm I put in Box 8 Other * (enter description), as "Portfolio Income" with the amount in that worksheet. And I didn't enter on any other form.

This clears the pink, I have no idea if this is correct treatment in TurboTax, I think it's just the working papers, not transmitted, who knows. I haven't filed yet. Maybe other's can chime in.
Sorry if I'm being dense but I don't see a Box 8. The K1P starts at Box 9c. And the K-1 is all line or letter enumerated. Line 20 on the K-1 is Other Information. Not sure where you meant
On the form image you posted in the original post, I put that in 8, at the bottom of the form.
I'm following up as an fyi for yourself and anyone finding this thread in the future. I also posted the question in the TurboTax forum but didn't get an answer till today. Someone on the TT forum with an "Expert" icon by their name posted the same as answer as you did. Enter the code AE information manually in Box 13 in the section labeled Code W to ZZ : Other Deductions line 8 labeled Other (enter description)
DejKay
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Re: Turbotax not handling K-1 Box 13 Code AE

Post by DejKay »

I tried to do my taxes today and am getting similar issues: My K-1s from an Angellist rolling fund have a positive number in Box 13 labeled AE and the drop-down menu for Box 13 now has AE as an option, but I get a message during review that says "Partnership Additional Info 1: Other deduction fields have no entry. A total of 321* has been entered for code(s) W to ZZ. Code(s) W to ZZ require(s) additional information. Please enter 321 on the appropriate line or lines in this section." and it only enables me to add it to "Other taxes" - The Turbo Tax specialist told me to enter -321 in that field but it then changes my tax owed/refund number (the fund has not paid out anything since I invested in it) and the only place I see a negative number anywhere on the K-1 is "Partner's Capital Account Analysis" which shows -321 in "Current year net income (loss)" - do I do what he says and/or is there something else where I should be pasting the note on the K-1 - which says "NET INVESTMENT INCOME - UNLESS OTHERWISE STATED BELOW, ALL TAXABLE INCOME REPORTED ON THIS K-1 REPRESENTS NET INVESTMENT INCOME UNDER INTERNAL REVENUE CODE SECTION 1411.".

The specialist told me I needed to pay for TurboTax to do my taxes for me if I wanted any more guidance. :-/

*or whatever - this is happening on a whole bunch of K-1s

Any guidance appreciated.
Topic Author
LookinAround
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Re: Turbotax not handling K-1 Box 13 Code AE

Post by LookinAround »

DejKay wrote: Sat Apr 06, 2024 8:54 pm I tried to do my taxes today and am getting similar issues: My K-1s from an Angellist rolling fund have a positive number in Box 13 labeled AE and the drop-down menu for Box 13 now has AE as an option, but I get a message during review that says "Partnership Additional Info 1: Other deduction fields have no entry. A total of 321* has been entered for code(s) W to ZZ. Code(s) W to ZZ require(s) additional information. Please enter 321 on the appropriate line or lines in this section." and it only enables me to add it to "Other taxes" - The Turbo Tax specialist told me to enter -321 in that field but it then changes my tax owed/refund number (the fund has not paid out anything since I invested in it) and the only place I see a negative number anywhere on the K-1 is "Partner's Capital Account Analysis" which shows -321 in "Current year net income (loss)" - do I do what he says and/or is there something else where I should be pasting the note on the K-1 - which says "NET INVESTMENT INCOME - UNLESS OTHERWISE STATED BELOW, ALL TAXABLE INCOME REPORTED ON THIS K-1 REPRESENTS NET INVESTMENT INCOME UNDER INTERNAL REVENUE CODE SECTION 1411.".

The specialist told me I needed to pay for TurboTax to do my taxes for me if I wanted any more guidance. :-/

*or whatever - this is happening on a whole bunch of K-1s

Any guidance appreciated.
Yes, Box 13 on the K-1 has an AE code in the pull down but trying to use it, I had the same problem as you. Do NOT use Box 13 on the K-1. Instead, go to Box 13 in TT form K1P Addl Info. There's a subsection labeled Code W to ZZ, Enter your AE code / description / amount manually in Line 8 labeled Other*. That's what I was told and did. I was to by a TT person online. Their userid was marked as a "tax expert".
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