K-1 Input / Questions

[Crank]

I really hate K-1s.

I have a K-1 with an amount on line 19C (Distributions) however the TRX / TaxWorks input form only has hard coded input boxes for Lines 19A & 19B. The K-1 instructions dont address this line but I assume its not a "Distribution of money" (19A) so I put it in 19B "Distributions of property other than money".

Am I correct putting it on line 19B?

Has anyone else had this or a similar issue?

Also, the K-1's state that "You may be required to file state returns for each state in which the partnership had operations. The three K-1s for this one client list 18 states each with income ranging up to $59. How do I determine if state returns need to be filed in each of these 18 states (ugh read every single state's income tax guide lines?).

And assuming each requires a state return I wonder if TRX can handle a return with 18 states all being efiled.

And the bill for this will be ridiculous charging for each state and research time it could be very large for a family of four in the lower end of the 25% tax bracket

[GeneInAlabama]

Do we need to file a nonresident state return if the income is below a certain level? I hope I haven't been missing something.

[Kea]

Depends on the state. Both QuickFinders and The TaxBook have State tabs that list the filing requirements for each state (resident & non-resident). I did learn last year that NM requires an NR return for ANY amount. (BTW, TaxWorks did not calculate any tax for the NM return I rolled over from ATX which calculated $2. It won't even let me "peek" at the form to see how its calculations vary. Oh well, I hope I don't need that one this year.)

I wish I could tell you if line 19B is correct. Don't you just love it when the K1 instructions for a particular line say "Check with your tax professional?" Gee, thanks, that tells me a lot.

If you don't have either of these books, you can list the 18 states, and I can look up their NR requirements.

[Crank]

Wow. I really HATE K-1s

Thank you Kea! Here are the 17 non-resident states and the related income (net of G/l's).

CA - 62

CT - 3

FL - 1

IL - 10

IN - 15

MI - 8

MO - 2

NJ - 13

NY - 56

OH - 10

TN - 2

TX - 1

[Kea]

Wow. I really HATE K-1s

Thank you Kea! Here are the 17 non-resident states and the related income (net of G/l's).

Here's what I found in the 2010 The TaxBook regarding non-resident states:

CA - 62 - you may want to research CA's rules. TB says if they have any CA sourced income & meet the other CA filing requirements

CT - 3 - have gross income over certain limits (and a few things that probably don't apply). Also says: NR must generally file if they meet the filing requirements above & have any CT source income. EXCEPTION: Income from casual, isolated, or inconsequential activities is not included in CT source income.

FL - 1 - No state income tax

IL - 10 - NR must file "if they earned income from IL sources, or want a refund of IL income tax withholding"

IN - 15 - "...if they receive income from Indiana sources"

MI - 8 - must file if they have Michigan source income & owe MI tax or their Fed AGI exceeds exemption allowance. NR prorate exemption allowance. NOTE: if you file a federal return you should file a MI return, even if no tax liability, to avoid unnecessary correspondence

MO - 2 - over $600 in MO income

NJ - 13 - any NJ source income & meet other gross income tests ($10-20K depending on filing status)

NY - 56 - various filing levels depending on filing status ($3K - $15K) and: are subject to minimum income tax; or incurred a NY NOL with out incurring a similar federal NOL

OH - 10 - any OH source income unless one of the exceptions is met:

-- Individual is a full-year NR living in a border state & NR's only OH source income is from wages & salary.

--individual has no Sch A adjustments & Fed AGI does not exceed $11,600 or $13,200 (depending on filing status)

--Individual's only source of income is retirement income eligible for the retirement income credit and the credit is the same or more than tax before credits

--Individual's exemption amount is the same or more than OH AGI. OH allows a $1600 exemption for each taxpayer and each dependent reported on the federal return.

TN - 2 --required if they maintained a residence in TN > 6 months AND taxable interest & dividend income exceeds $1250 ($2500 MFJ).

TX - 1 -- No state income tax

Gee that doesn't look like that saves you many states.

I've run into a few K-1s like this, but the states they've listed generally had reasonable minimums. The only time I've had to file a state return due to a K-1 was for one based in OK and all income was OK. They even supply an OK K-1. Since my client is in TX, the OK is NR and cannot be e-filed.

Might I suggest an extension for this? But, be careful, some states accept Fed extensions & some don't.

Good luck!

[Crank]

<sigh>

Kea,

Thank you very much! I really appreciate you taking the time to do this. The extension idea sounds good at this point, but Ill have to do a bit more research.

Again THANKS!

[Kea]

I just wish I could have given you better news. I know several states are like MO that just say amounts over X are reported. I couldn't believe almost all your states were not as generous.

I'm glad I could help answer your question. I always feel like I ask way more questions than I answer.

Good luck. (again)

[Kea]

New client has 3 of these Oil / Gas K-1s (and an easy farm partnership one). 2 of these show a Gross Income (or Gross Receipts) column with "substantial" amounts (several hundred $). Is this the column I need to use? Or, do I add up values from other specific columns. If so, which columns? Most of the other columns are negative, so if I can use those, I probably won't have to any states. If I use the "Gross" column, I'll be doing a bunch. Then I'll have no idea what gets reported where on a state return.

I've only done a couple of these types of K-1s before & pretty much everything was negative. So, I didn't really care how the specific calculation was done, because I was under the State's limits no matter what.

One thing I did find helpful from a post on the "main" part of this board was the link to the Tax Packages website. All 3 of the ones I am working on are on that site. Just needed the client to grant me access to their accounts. There is a link on the left ("Transfer Federal K1 amounts to Tax Forms") that shows you how all the appropriate forms get filled out on the Federal schedule - specifically for YOUR CLIENT!! (No help for the states!)

I hope the Tax Package Tax forms info helps you, Crank, & anyone else working on these. Perhaps it will show you where to carry your distributions in Box 19C.

But I hope someone can advise what totals to use to see if state is required.

Thanks

[Crank]

Kea,

Im trying to find the sectio you referenced in this part of your post:

"One thing I did find helpful from a post on the "main" part of this board was the link to the Tax Packages website. All 3 of the ones I am working on are on that site. Just needed the client to grant me access to their accounts. There is a link on the left ("Transfer Federal K1 amounts to Tax Forms") that shows you how all the appropriate forms get filled out on the Federal schedule - specifically for YOUR CLIENT!! (No help for the states!)"

I assume you mean in the ATX Forum

- The second topic from the top (pinned) titled "Tax Software Vendor List"

- The second link in the post titled "Taxsites.com" / Link To Vendor Websites"

After I go to the site here: http://www.taxsites.com/Income-Tax-Preparation.html

I cant find the link on the left ("Transfer Federal K1 amounts to Tax Forms") that shows you how all the appropriate forms get filled out on the Federal schedule - specifically for YOUR CLIENT!

Is this the correct place that you were referencing? Could you please provide a link to it.

Thanks

[Kea]

Crank - Sorry I wasn't more specific in my previous post. I didn't look for the specific post while I was typing the reply. I was being lazy and not opening another tab.

What I meant was the 5th reply in this post on General Chat:

My link

You have to copy and paste the whole link, or just use this one:

Tax Package link

From there you can choose the specific company -- if it's on the list. Your client will need to set up a log-in account & then add you to the list of allowable log-ins. The only info your client needs is an e-mail address, SSN & Last Name. The "unit holder" can then add other e-mail addresses.

Once you log in there are several choices down the left side. You can get a .pdf of everything that was mailed to your client (so you don't have to scan if you want to keep electronically) & you can check the tax forms entry. Those are the only 2 I've used.

Hope that helps.

[Crank]

Thank you Kea! :)

[Kea]

You're welcome. I hope your K-1s are on that site.

So what did you include when you came up with the state totals? Did you add up the columns or just use a gross income column? I'm finding the gross income column is MUCH higher than the adding up the columns.

Thanks!

[MontanaEA]

From Kea:

Tax Package link

From there you can choose the specific company -- if it's on the list. Your client will need to set up a log-in account & then add you to the list of allowable log-ins. The only info your client needs is an e-mail address, SSN & Last Name. The "unit holder" can then add other e-mail addresses.

Once you log in there are several choices down the left side. You can get a .pdf of everything that was mailed to your client (so you don't have to scan if you want to keep electronically) & you can check the tax forms entry. Those are the only 2 I've used.

Hope that helps.

[Crank]

You're welcome. I hope your K-1s are on that site.

So what did you include when you came up with the state totals? Did you add up the columns or just use a gross income column? I'm finding the gross income column is MUCH higher than the adding up the columns.

Thanks!

I looked at the requirements of each state's Non-Resident returns. They are all different in what is taxable. Most say gross income from all sources which I interpreted to be net of gains / losses.

I havent done them all as this will be an extension to give me time to look at 18 states.

Hope this helps!

[Kea]

Thanks, but I'm still curious about this "Gross Income" or "Gross Receipts" column. In one example, on the K1 itself, box 1 = <320>, box 5 = 2, and box 9a = 62. One of the states is LA and it has:

1 Ordinary income or loss = <106>

2 Interest income = 1

3 Net short term CG = 0

4 Net Long term CG = 21

5 Gross Receipts = $977

LA says to file with any LA sourced income. If I use 1 - 4, I'm still negative. But 5??? Or, does that not come into play since their expenses apparently exceeded their receipts? So, still no net income? Or, does 5 get added to 1-4?

Even though I won't spend much time on the states until after 4/18, I just want to know which ones will need extensions.

MontanaEA - I'm glad you liked the link, but the credit goes to JRS who posted it on the General Chat section.

[Crank]

I didnt have any with Gross receipts but I think it would not be based on this. I assume that is just gross revenue before expenses so I would use the ord income plus gains or losses. Just my opinion and I could be wrong.

As I said before. I REALLY hate K-1s.

Hope that helped.

[Kea]

I'm starting to hate them, too. The 1st few were no big deal. Then came these!