This article focuses solely on the entry of the Other Information Items which are found on Box 17 of the Schedule K-1 (Form 1120S) Shareholder’s Share of Income, Deductions, Credits, etc. For additional information regarding the requirements for Schedule K-1 (Form 1120S), see: Shareholder’s Instructions for Schedule K-1 (Form 1120S).
To enter the Other Information Items from a K-1 (Form 1120S) in Keystone Tax Solutions Pro from the Main Menu of the Tax Return (Form 1040) select:
- Income Menu
- Rents, Royalties, Entities (Sch E, K-1, 4835, 8582)
- K-1 Input – Select ‘New’ and double-click on Form 1120S K-1 S Corporation which will take you to the K-1 Heading Information Entry Menu. If the initial K-1 entry was previously keyed in, double click on the entry in the K-1 pick list.
After entering all of the information required on the K-1 Heading Information screen, select ‘OK’. The K-1 1120S Edit Screen. has two distinct sections entitled ‘Heading Information’ and ‘Income, Deductions, Credits, and Other Items.’
The K-1 1120S Edit Screen in Keystone Tax Solutions Pro has an entry for each box on found on the Schedule K-1 (Form 1120S) that the taxpayer received. A description of each of the Other Information Items contained in Box 17 can be found below.
Other Information
Line 17A – Investment Income – The amount reported in Box 17, Code A is the taxpayer’s share of investment income (interest, dividends, etc.) from the corporation. This income should have been recognized elsewhere on this K-1 in the Income items. The amount in Box 17, code A is provided for informational reasons only. No amount entered in this field will flow to Form 4952 or to Form 1040, Schedule B. However, the amounts entered elsewhere for interest, dividends, etc., will flow to Form 4952.
Line 17B – Investment Expense – The amount reported in Box 17, Code B may need to be reported on Form 4952, Line 5. No amount entered in this field will automatically flow to the Form 4952. To access Form 4952, Line 5 from the Main Menu of Keystone Tax Solutions Pro go to Itemized Deductions Menu, then Interest You Paid, then Investment Interest (4952), then Amount of Investment Expenses.
Line 17C – Qualified Rehabilitation Expenditures (other than rental real estate) – The corporation will report the taxpayer’s share of qualified rehabilitation expenditures and other information needed to complete Form 3468 for property not related to rental real estate activities in Box 17, Code C. The taxpayer’s share of qualified rehabilitation expenditures related to rental real estate activities is reported in Box 13, Code E. See: Instructions for Form 3468. If the corporation is reporting expenditures from more than one activity, the corporation should provide a statement that will separately identify the expenditure. No amount entered in this field will flow to the Form 3468. Form 3468 can be accessed from the Main Menu of Keystone Tax Solutions Pro by selecting, Credits, General Business Credit (3800), Current Year Business Credits, Form (3468).
Line 17D – Basis of Energy Property – The amount reported in Box 17, Code D may be needed to calculate the Investment Credit available on Form 3468. See: Instructions for Form 3468. No amount entered in this field will flow to the Form 3468. Form 3468 can be accessed from the Main Menu of Keystone Tax Solutions Pro by selecting, Credits, General Business Credit (3800), Current Year Business Credits, Form (3468).
Line 17E – Recapture of Low-Income Housing Credit (section 42(j)(5)) – Amounts reported in Box 17, Code E represent the Low-Income Housing Credit recapture amount due to a disposition or basis change, typically for an investment by the corporation in a partnership that has more than 35 partners, and this amount may be reported on Form 8611. No amount entered in this field will flow to the Form 8611. Form 8611 can be accessed from the Main Menu of Keystone Tax Solutions Pro by selecting, Other Taxes Menu, Other Taxes, Recapture of Low-Income Housing Credit – 8611. See: Instructions for Form 8611.
Line 17F – Recapture of Low Income Housing Credit (other) – Amounts reported in Box 17, Code F represent the Low-Income Housing Credit recapture amount due to a disposition or basis change typically for an investment by the corporation in a partnership that has less than 35 partners and this amount may be reported on Form 8611. No amount entered in this field will flow to the Form 8611. Form 8611 can be accessed from the Main Menu of Keystone Tax Solutions Pro by selecting, Other Taxes Menu, Other Taxes, Recapture of Low-Income Housing Credit – 8611. See: Instructions for Form 8611.
Line 17G – Recapture of investment credit – The amount reported in Box 17, Code G may need to be reported on Form 4255. No amount entered in this field will flow to the Form 4255. To access Form 4255, from the Main Menu of Keystone Tax Solutions Pro select Other Taxes Menu, Other Taxes, Recapture of Investment Credit – 4255. See: Instructions for Form 4255.
Line 17H – Recapture of other credits – The amount reported in Box 17, Code H represents the recapture of other business credits that may need to be reported on Form 1040. No amount entered in this field will automatically flow to Form 1040. See the shareholder’s instructions provided by the corporation for further information on the treatment that these items will receive.
Line 17I – Look back interest – completed long-term contracts – Amounts reported in Box 17, Code I are reported on Form 8697. No amount entered in this field will flow to the Form 8697 and Keystone Tax Solutions Pro does not currently support Form 8697. However, if additional tax is due, Form 8697 can be attached to Form 1040 as a PDF file, See: Form 8697; The appropriate entry can be made in the tax progream on the Other Taxes line of the Form 1040. See: Instructions for Form 8697. To enter any additional tax from Form 8697 on Form 1040, from the Main Menu of the tax program by select, Other Taxes Menu, Other Taxes, Interest Computed Under the Look Back Method.
If after the completion of Form 8697 a refund is due to the taxpayer, Form 8697 is NOT filed with Form 1040. Instead, the taxpayer must file Form 8697 separately with the IRS consistent with the Instructions for Form 8697.
Line 17J – Look back interest – income forecast method – Amounts reported in Box 17, Code J are reported on Form 8866. No amount entered in this field will flow to the Form 8866 and Keystone Tax Solutions Pro does not currently support Form 8866. See the shareholder’s instructions provided by the corporation for further information on the treatment that these items will receive.
Line 17K – Depreciation of property with section 179 deductions – Amounts reported in Box 17, Code K may need to be reported on Form 4797. No amount entered in this field will flow to the Form 4797. Form 4797 can be accessed from the Main Menu of the tax program by selecting Income, Other Gains/Loss (4797, 8824), Form 4797. See the shareholder’s instructions provided by the corporation for further information on the treatment that these items will receive.
Line 17L – Recapture of Section 179 deduction – Amounts reported in Box 17, Code L represent the taxpayer’s share of any recapture of section 179 expense deduction if the business use of the property dropped to 50% or less. See the partner’s instructions provided by the partnership for further information on the treatment that these items will receive.
Line 17M – Section 453(l)(3) Information. – Amounts reported in Box 17, Code M represent the taxpayer’s share of taxes as a result of the sale of certain class of assets (residential lots and timeshares) on an installment basis. This is reported on Form 1040, Line 62 with box c checked and “453(l)(3)” and the amount entered to the left of line 62. To enter this tax on Form 1040, from the Main Menu of Keystone Tax Solutions Pro select, Other Taxes Menu, Other Taxes, Other Taxes #1, 453(I)(3) – Interest on Tax Due on Certain Installment Income.
Line 17N – Section 453(A)(c) Information. – Amounts reported in Box 17, Code N represent the taxpayer’s share of taxes as a result of the gain on sale of certain assets (property with a sales price over $150,000) on an installment basis. This is reported on Form 1040, Line 62 with box c checked and “453(A)(c)” and the amount of the tax entered to the left of line 62. To enter this tax on Form 1040, from the Main Menu of the tax program select, Other Taxes Menu, Other Taxes, Other Taxes #1, 453(A)(c) – Interest on Tax Due on Deferred Tax on Certain Installment Sales Gain.
Line 17O – Section 1260(b) Information. – Amounts reported in Box 17, Code O represent the taxpayer’s share of taxes as a result of the gain on the sale of assets on an installment basis. This is reported on Form 1040, Line 62 with box c checked and “1260(B)” and the amount of the tax entered to the left of line 62. To enter this tax on Form 1040, from the Main Menu of the tax program select, Other Taxes Menu, Other Taxes, Other Taxes #1, 1260(B) – Interest Charged on Deferral of Gain.
Line 17P – Interest Allocable to Production Expenditures. – Amounts reported in Box 17, Code P represent the information that the taxpayer needs to capitalize any interest related to production expenditures under Section 263A. See the shareholder’s instructions provided by the corporation for further information on the treatment that these items will receive.
Line 17Q – CCF Nonqualified Withdrawals. – Amounts reported in Box 17, Code Q represent the taxpayer share of nonqualified withdrawals from a capital construction fund (CCF). These withdrawals are taxed separately from the taxpayer’s other gross income at the highest marginal ordinary income or capital gains tax rate. The taxpayer is required to attach a statement to Form 1040 to show the computation of both the tax and interest for a nonqualified withdrawal. Include the tax and interest on Form 1040, line 62. In the space to the left of line 62, enter the amount of tax and interest and “CCF.” Keystone Tax Solutions Pro does not currently support this calculation or entry.
Line 17R – Depletion Information – Oil & Gas. – Amounts reported in Box 17, Code R represent information the taxpayer needs to figure their share of any depletion deduction. See: Publication 535 – Business Expenses.
Box 17, Code S has been reserved by the Internal Revenue Service and is not currently in use. No entry should be made in this field for tax years commencing with 2014. Line 17, Code S was used prior to 2014 to report the taxpayer’s share of Amortization of Reforestation Cost.
Line 17T – Section 108(I) Information. – If the corporation made a section 108(I) election, it will provide the taxpayer with a statement identifying the taxpayer’s share of affected items. See the shareholder’s instructions provided by the corporation for further information on the treatment that these items will receive.
Line 17U – Net Investment Income. – An amounts reported in Box 17, Code U is the information that is provided to the taxpayer to determine their net investment income tax under section 1411. See the shareholder’s instructions provided by the corporation for further information on the treatment that these items will receive and the Instructions for Form 8960 – Net Investment Income Tax.
Line 17V – Section 199A income –Amounts reported in Box 17, Code V is ‘Qualified Business Income” which is generally defined as income that is related to the corporation’s business activities and it does not include investment income or the reasonable compensation paid to the shareholders for services rendered to the corporation. This amount will automatically pull to the applicable Qualified Business Income Deduction (‘QBID’) worksheet under the Tax Computation Menu and used to calculate any QBID.
Line 17W – Section 199A W-2 Wages – Amounts reported in Box 17, Code W are the wages paid by the corporation that were reported to the Social Security Administration on a W-2. The amount entered as W-2 Wages does not carry to the QBID Simplified Worksheet because it is not used on that worksheet to calculate the QBID for taxpayers that are permitted to use the Simplified Worksheet. This amount will automatically pull to the Qualified Business Income Deduction worksheet under the Tax Computation Menu and is used in the calculation of the QBID for taxpayers above the taxable income thresholds.
Line 17X– Section 199A unadjusted basis – Amounts reported in Box 17, Code X is the unadjusted basis of qualified property held by the corporation. Qualified property is generally defined as the original cost of assets that were placed in service by the corporation in the past ten years and still used by the corporation and the original cost of assets still being depreciated by the corporation because the recovery period is greater than ten years. The amount entered as unadjusted basis of Qualified Property does not carry to the QBID Simplified Worksheet because it is not used on that worksheet to calculate the QBID for taxpayers that are permitted to use the Simplified Worksheet. This amount will automatically pull to the Qualified Business Income Deduction worksheet under the Tax Computation Menu and is used in the calculation of the QBID for taxpayers above the taxable income thresholds.
Line 17Y– Section 199A REIT dividends – Amounts reported in Box 17, Code X are the REIT dividends received by the corporation. This amount will automatically pull to the applicable Qualified Business Income Deduction worksheet under the Tax Computation Menu and is used in the calculation of the QBID.
Line 17Z– Section 199A PTP income – Amounts reported in Box 17, Code Z is the Publicly Traded Partnership income reported by the corporation. This amount will automatically pull to the applicable Qualified Business Income Deduction worksheet under the Tax Computation Menu and is used in the calculation of the QBID.
Line 17AA– Excess taxable income -Amounts reported in Box 17, Code AA is the excess taxable income determined by the corporation for the purpose of the limitation placed on the corporation’s ability to deduct business interest. See Form 8990, Limitation on Business Interest Expense Under Section 163(j).
Line 17AB– Excess business interest income -Amounts reported in Box 17, Code AB is the excess business interest income determined by the corporation for the purpose of the limitation placed on the corporation’s ability to deduct business interest. See Form 8990, Limitation on Business Interest Expense Under Section 163(j).
Line 17AC – Other Information – Box 17, Code AC are other items of information not found elsewhere on the Schedule K-1 (Form 1120S) Shareholder’s Share of Income, Deductions, Credits, etc. The taxpayer should receive instructions from the corporation needed to address the items contained in this box.
NOTE: This is a guide on entering the Other Information items from Schedule K-1 (Form 1120S) into the tax program. This is not intended as tax advice.
Additional Resources
Shareholder’s Instructions for Schedule K-1 (Form 1120S)
Schedule K-1 (Form 1120S) – Overview
Schedule K-1 (Form 1120S) – Heading Information
Schedule K-1 (Form 1120S) – Income (Loss) Items
Schedule K-1 (Form 1120S) – Deductions
Schedule K-1 (Form 1120S) – Credits & Foreign Transactions
Schedule K-1 (Form 1120S) – Alternative Minimum Tax (AMT) Items
Schedule K-1 (Form 1120S) – Items Affecting Shareholders Basis