1065 K-1 Box 20 AJ Code

Please let me know if you get this figured out. I’m having the exact same issue.

Same exact issue.  I hope they post an official "Correct" answer to this soon.

To be accurate, you should enter Box 20 Code AJ twice - once for Gross Income and again for Total Deductions.

Note, however, that this information will be used only if your net losses from all businesses are more than $289,000 ($578,000 if filing a joint return). 

See also: 

• IRS Instructions for Form 1065 Schedule K-1 Box 20 Code AJ
• IRS Instructions for Form 461 - Limitations on Business Losses

@siraseranant 

@Lalo86 

@ray2ray 

Disclaimer:  I am not an accountant or a tax expert; only the poor schlump that has to figure out my wife's and my taxes.  So here is how I finally resolved this (in the Desktop version). 

The problem:  information in your K-1 for the code AJ is reporting two figures:  An aggregate for income and and aggregate for deductions.  Note that these are only relevant if the K-1 is reporting an overall loss for the business,  which is going to end up on your schedule E, along with other potential losses from other businesses, like on a Schedule C.  If there is a loss, and it the loss is also subject to the excess business loss rules (explained by PatriciaV), you would have to figure that limitation separately on Form 461, which TurboTax does not include.  However, TurboTax does not give a guide to how to enter the information you've received.

Actually, what TurboTax is giving you is a record-keeping mechanism for recording the information you received on your K-1, to be used if needed to fill out a Form 461.  If you have no losses, the AJ information is not going to appear on any forms the IRS will see in your submission.  However, for the sake of completeness, you still might want to get these numbers into TurboTax.

So, in order to keep TurboTax consistent with the K-1, here's what I did:

 - In the Step-by-Step, enter two AJ line entries in the Box 20 info for the two figures provided in my K-1 Statement explanation for the Aggregate Income and Aggregate Deduction.  If this is all you do, you will get the error about the gasification amount.

 - When the Step-by-Step asks for Other Box 20, information, I put two line items, which I labeled "AJ - Aggregate Business Income" and "AJ - Aggregate Business Deductions" with the appropriate amounts from the K-1.  Now, TurboTax reports no errors.

This can also be accomplished (or double-checked) in the desktop version by going into the forms and putting the information in the relevant places.  This would include the K-1 Partner form Part III item 20 and/or the K-1P Addl. Info, same section.

@siraseranant 

@takefive73 

@Lalo86 

@kmadsen12 

@DouglasWade 

Turbo Tax, What is the answer?

After Selecting Code Z a few questions later you will see a screen titled: We need some information about your 199A income.

Below you must select the first check box: XXX has business income (loss)

Fill in the new boxes in accordance with your K-1 Statement.