The only time I see this come up is with PTP's in the oil & gas energy fields. And my people have a ton of them as they are the favorite new-kid-on-the-block with brokers. I have read the instructions, and while it says a partnership may calculate this at the entity level and pass thru to the partners on K-1, it does not mention PTP's specifically. My question is, if there is a W-2 wage figure present on the K-1 supplemental info, is this used on the 8903 for the TP? The TP does not have any wage income himself.
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Yes, that's what you use. The deduction, the form and the instruction are very complicated to read and understand. So all I do is just plug the amounts furnished on the K-1 onto the lines on F-8903. Whatever then flows to F-1040 is good by me. No one will ever know if it's exactly right or not, including the IRS. The amounts are usually very small. If your client has two or more K-1s, combine them into a single entry for each line on F-8903. Use column (a) for oil and gas activities.
All the oil & gas flow-thru entities I have seen have been PTPs.Roland Slugg
"I do what I can." -
Thanks. I did all that, but I did not notice an input line for the wages in the software. I must have missed it. Will check again.Comment
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The K-1 from the oil & gas partnership(s) should have an entry on line 13, letter T, but it will probably just say, "See attached." If so, there will be a schedule attached to the K-1 with all the amounts you should need. You will then have to enter those amounts on the relevant lines of F-8903 or on the input screen for that form, depending on what tax prep software you use.Roland Slugg
"I do what I can."Comment
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