Partnership K-1 Line 19D for reduction in partnership liabilities

Forum|Forum|4 months ago
February 13, 2026
2 replies
97 views

Is Lacerte going to update to automatically pull this information to K-1s in line with the new IRS form instructions? There are manual input screens where this can be accomplished but wondering if Lacerte will be updated to automatically capture this as it does with regular distributions in Line 19?

Lacerte Tax

S

strongsilence

Level 10

Do you use the allocation input forms?

K

Karen_pdx

Level 5

I have the same question. i don't see the new distribution codes on partnership K-1s processed even this week.

B

bzachAuthor

Level 3

It definitely isn't happening automatically. You can manually enter the liability reduction amount in the Distributions section of the M-2 screen as "deemed distributions of money-decrease in partner's share of liabilities" and it will allocate it out to partner K-1s as Code D. However, that input also runs it through as a decrease in capital accounts, which is definitely not the desired result since a decrease in liabilities is not a decrease in capital.

However, there is another input on screen 22.1 "Other Schedule K Items" where you can input an adjustment to "Deemed distributions of money-decreases in partner's share of liabilities". If you enter the decrease in liabilities there, it will pull to K-1 Line 19 Code D without impacting capital. That is my current workaround.