K-1 (1065) Lines 13 & 20 HELP please

[taxjungle]

Hello. I'm entering information from several K-1s (1065) Partnerships for taxpayer's Form 1040 return.

Can someone help me with Line 13 & 20? My tax program K-1 screen doesn't seem to have the proper descriptions for these entries so I don't know how to enter them or how they may flow to other forms, i.e. 8903 etc.

K-1 shows:
Line 13S1 Domestic Production Gross Receipts (DPGR): $25
13S2 Cost of Goods Sold allocable to DPGR : $0
13S3 Total deductions, expenses, and losses directly allocable to
DPGR $8
13S4 Other deductions, espenses, and losses Not directly allocable
to DPGR: $454
13S5 Employer's W-2 wages: $0

Line 20:
20W1 Sec. 743(b) adjustments included in Line 1 and/or Line 10 $ -173
20W2 Gross Receipts for UBTI (unrelated business taxable income) $34,849
20W3 Gross Deductions for UBTI $34,265

[Bees Knees]

Ignore line 13 data. With W-2 expense allocated to this partner at zero, this partner does not qualify for the Domestic Production Activities Deduction.

Line 20 seems to be giving you unrelated business income tax (UBIT) information. That would only be applicable if your partner was a tax exempt organization, like an IRA. Look in the partner information box where the name and address appears. If it says something about it being an IRA, then you don't enter any of the K-1 info on the 1040. If the partner is not an IRA, then I would ignore line 20 info as well.

[Bees Knees]

20W1 Sec. 743(b) adjustments included in Line 1 and/or Line 10 $ -173

For info on the 743(b) adjustment, you need to see page 9 of the partnership tab in TheTaxBook. It has a section on this election and how it applies. I would think if this partnership is making such an election, there should be instructions provided to the partner on what to do with that number. Otherwise, call the partnership and ask them to explain exactly what the partner is supposed to do. The election has to do with adjusting the partner's basis, so it might not have any implications this year, but it will have implication in the future when you try to deduct losses against basis or liquidate.

[taxjungle]

K-1 (1065) lines 13 & 20 HELP please

Thank you Bees Knees for taking the time to answer my question. Really appreciate it. Have a great day! taxjungle