Discussion:1065 Preparation - Special Allocations
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Discussion Forum Index --> Basic Tax Questions --> 1065 Preparation - Special Allocations
Discussion Forum Index --> Tax Questions --> 1065 Preparation - Special Allocations
Msmith7305 (talk|edits) said: | 5 February 2008 |
| Have come into a new 1065. Partners (4) specially allocate the gross revenue to the partner who earned it and split overhead 25% each. In reviewing the 1065 instructions, it appears that any item of income, loss, deduction, etc. that is subject to special allocation is not to be entered on page 1 of the 1065 but, instead, is to be separately stated on line 11 of Schedule K.
From 1065 Instructions: "For instance, if the net income exclusive of specially allocated items is divided evenly among three partners but some special items are allocated 50% to one, 30% to another, and 20% to the third partner, report the specially allocated items on the appropriate line of the applicable partner’s Schedule K-1 and the total on the appropriate line of Schedule K, instead of on the numbered lines on page 1 of Form 1065 or Schedules A or D." Doing this will have all the expenses showing on page 1 with none of the gross revenue. Am I looking at this correctly? Thanks | |
CyberCrone (talk|edits) said: | 19 February 2008 |
| I think it's the other way around. The income is entered on page 1 and the specially allocated items are entered in Schedule K and on the partner's K-1. This is quite different from the way they did it as little as three years ago. Figuring out what the "appropriate lines" are is the rub. Some categories seem vague and poorly defined. On the K-1, I am entering each partner's expenditures for business expenses under line 13, Other deductions, and attaching Schedule A, Itemized Deductions. I don't know if that's right or not, but if it's wrong all that will happen is the IRS will send me a letter and I'll fix it. I don't think they come at you with murder and mayhem in their hearts as often as they used to. | |
Msmith7305 (talk|edits) said: | 20 February 2008 |
| CyberCrone-
Not the other way around. In mine, the GROSS INCOME is specially allocated. The expenses (overhead) ARE split according to their profit/loss ratio. If I read the IRS correctly, any specially allocated items are NOT LISTED on page 1. Hence, the gross revenue would be entered on line 11 of Schedule K. | |
