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Why is my schedule k-1, box 13 code AE showing as other taxes on schedule A, line 11?

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March 18, 2024
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Best answer by PatriciaV

1065-K1

Description in the K-1 is as follows:

Box 13, Code AE - Deductions - Portfolio Income

Deductions - Portfolio (Formerly deductible by Individuals under IRC Section 67 subject to 2% AGI floor)

As the description says, portfolio deductions are no longer deductible on individual returns. For partners other than individuals, amounts that are clearly and directly allocable to portfolio income (other than investment interest expense and section 212 expenses from a REMIC) can be deducted on those partners’ income tax returns. (IRS Instructions for Form 1065)

To be accurate, you should omit this code and amount from the K-1 on your 1040 return.

PatriciaV

Form 1040 Schedule A Line 11 is for charitable contributions. Schedule K-1 Box 13 Code AE reports a credit for small employer pension plans. Have you reviewed your K-1 entry to be sure you chose the correct box and code?

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A

a0458959Author

Thanks for the response.

I have review the K-1 from the partnership. Box 13, Code AE is what was on the K-1 document.

I misstated Line 11 on Schedule A. TurboTax put it on line 6 and listed as "Other taxes from Schedule K-1". Given that it was Code AE, I expected TurboTax to put as "charitable contribution" or it would fall under "deducts" limited by the 2% AGI.

Any thoughts on why it went under schedule A, other taxes?