Corduroy Frog Posted September 6, 2021 Report Share Posted September 6, 2021 Maybe I'm an idiot, but I'm working this Labor Day, and I need help from Drake, who (like most sane people) is shut down for the Holiday. An LLC (Form 1065) has a large amount of Tax Exempt Income (e.g. PPP forgiveness). There appear to be no field whereby this amount can be entered - not on the K-1 distribution, or anywhere else. I am able to enter into the M-1 reconciliation, but that's about all. Does anyone out there know where to enter this? I don't blame anyone for not reading or responding and ruining their Holiday. Quote Link to comment Share on other sites More sharing options...
Lee B Posted September 6, 2021 Report Share Posted September 6, 2021 If I was preparing this return, the only place I would enter it is on Line 6 Schedule M-1. 3 Quote Link to comment Share on other sites More sharing options...
Corduroy Frog Posted September 6, 2021 Author Report Share Posted September 6, 2021 WOW, thanks for being out there today! Thanks for the reply. Makes sense, and that might be why Drake does not allow for it. The big problem is Drake is now getting sticky about Basis worksheets, and Exempt Income increases Basis. Quote Link to comment Share on other sites More sharing options...
Bart Posted September 6, 2021 Report Share Posted September 6, 2021 That exempt income should increase basis 2 Quote Link to comment Share on other sites More sharing options...
Lee B Posted September 7, 2021 Report Share Posted September 7, 2021 My understanding is that the exempt income should be included in the "current year net income" line. If it is not then it should be on the "Other Increase" line. Quote Link to comment Share on other sites More sharing options...
Corduroy Frog Posted September 8, 2021 Author Report Share Posted September 8, 2021 I haven't been able to get back on the forum until late tonight, but there is an update. If I follow CBS initial advice about populating Line 6 on Sch M-1, everything magically is taken care of. FWIW, there is no requirement for the entity to furnish a Basis worksheet, as this requirement is only on the recipient of the K-1. Even though the tracking of basis is the responsibility of the recipient, I still try to furnish such a schedule privately on an Excel worksheet, since most recipients don't have a clue. Thanks again - Frog Quote Link to comment Share on other sites More sharing options...
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