Level 3

Question

K-2 (Foreign Info) How do you specially allocate depreciation on the K-2

Forum|Forum|4 years ago
February 10, 2022
3 replies
20 views

The new K-2 form. First off - Ugggh in general about the silly requirement! Anyway, it appears that there is no method to specially allocate depreciation. The K-3 form totally ignores special allocations that were done in all other parts of the input and just slaps a flat Profit % on the individual K-3. Am I missing something? has anyone else figured out a work around. There are millions of partnerships with S/A ... so can't imagine that this hasn't come up already. I have a call in to Lacerte, but it seems like there is no solution at this time. Yes, I realize I can extend but just trying to get some of these filed. If I didn't mention it a big, gigantic Uggh about this silly thing.

Lacerte Tax

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sjrcpa

Level 15

You can't efile the 1065s with K-2 until March 20 nor the 1120S until mid-June so you're looking at extensions anyway.

Yes it has been mentioned a few times that the software doesn't let you do special allocations on K-2/K-3. No word from Lacerte if they will fix.

The more I know the more I don’t know.

Y

yoyoAuthor

Level 3

It is my understanding that you can file K-2s prior you just have to attach them as PDFs, which is automated so no big deal.

G

gerryport2

Level 2

Hi!

It's not the most straightforward thing to do in Lacerte, however there is a way to allocate every item on the K3. First go to Screen 86.2. Once you input the amounts on this screen, everything here will be allocated based on partner %age. If you wish to specially allocate one specific item such as guaranteed payments or depreciation, you need to add a new prefix with the same country (on the left side of your screen click "Add"). Then only make an entry in the field that will be allocated differently (guaranteed payments, depreciation, etc.). Then make entries in the "Partner overrides: (-1 = none) (O)" with the appropriate percentages for this specific item. This will allow this specific item to be allocated based on your override, while everything else entered in the other prefix will be split based on partner %age.

Hope this helps!

Y

yoyoAuthor

Level 3

Thanks! Although I haven't yet tried your suggestion, I will give it a whirl eventually. The approach I took on the first 5-6 partnerships that I couldn't get out of preparing the darn K-2 on was to provide supplemental information that says " the IRS instructions don't allow for it but if your preparer wants to input the S/A depreciation difference - here is the amount" and referenced to an AH code they could use. I don't think 99% of the partners are going to attempt to add up these numbers from 5 - 40 K-1s and input it on a Form 1116 anyway - and suspect it won't make a rat's &*$ of difference even if they did.

C

cboggeln

Level 3

We are having the same issue as yoyo and reported the problem to lacerte that we are not being able to specially allocate the k-3 numbers. Most of our partnerships have special allocations so this is just not acceptable. Below is Lacertes response:

Dear

You contacted a member of our support staff regarding an unexpected behavior experienced in Intuit Lacerte. We promised to send you periodic updates on case number 1575980896 to keep you informed. Below is the latest update:

2021 PAR US Schedule K-3 Partner Overrides for Part II Section 1 Missing

This unexpected behavior has been determined to be working as designed. For more information related to this investigation, click Here

No further updates are scheduled for this Investigation. This will be our final communication for case number 1575980896

We thank you for your patience.
Intuit Customer Success

C

cboggeln

Level 3

We were told by Lacerte account manager that the only way to get their development team to address special allocations is to submit calculation challenges....sooooo Please, submit challenges so we can get this fixed!

qbteachmt

Level 15

Do you get IRS e-newsletters?

https://www.irs.gov/newsroom/irs-provides-further-details-on-additional-relief-for-certain-partnerships-preparing-schedules-k-2-and-k-3-for-2021

"The IRS today provided further details on additional transition relief for certain domestic partnerships and S corporations preparing the new schedules K-2 and K-3 to further ease the change to these new schedules. Those eligible for the relief will not have to file the new schedules for tax year 2021."

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