Where can I make special allocations for the partners on a 1065?
SA links starting in Drake15
In the 1065 package, to override the calculated amounts of Schedule K items that are allocated to partners on Schedule K-1, use the SA line-item window for special allocations that can be opened by clicking the desired SA link on the K, M2, 8825, RENT, 3468 and KFT screens. An example of the K screen is shown below:
Links to the SA window are also available on the M2, 8825, RENT, 3468, and KFT screens.
- Links are available on the M2 screen to reconcile the Analysis of Partners’ Capital to the Partner’s Capital Account Analysis in Section L of the K1.
- Links on the 8825 and RENT screens allow allocation of property.
- The Special Partner Allocations for 3468 Amounts link at the top-right corner of screen 3468 opens screen Schedule K, Line 20C for Form 3468, allowing you to allocate Form 3468 amounts to the partners.
- Links on the KFT screen allow allocation of foreign transactions to the partners by by dollar amount or percentage.
The SA window is available from screen links only - it is not listed in the Data Entry Menu.
Using the SA Window Links
You can use any of the SA links on a screen to override the allocation of an item for any or all of the listed partners. An example of an SA window on screen K for Ordinary business income (loss) is shown below.
Select the Allocation Type by choosing either Dollar Amount or Percentage at the top of the SA window. This enables editing of the related allocation column below.
Select Dollar Amount as Allocation Type. Enter the amount needed in the Dollar Amount field to the right of each partner listed.
When you tab past the Dollar Amount field, the percentage this amount represents is displayed in the Percentage field. You cannot edit the percentage while Dollar Amount is selected as the Allocation Type. You must first select Percentage.
Select Percentage as Allocation Type. Enter the decimal amount needed in the Percentage field to the right of each partner listed.
When you tab past the Percentage field, the dollar amount representing this percentage is displayed in the Dollar Amount field. You cannot edit the dollar amount while Percentage is selected as the Allocation Type. You must first select Dollar Amount.
The program keeps a running total of the amounts allocated. At the bottom of the SA window, review the amounts displayed under Unallocated and Allocated.
SA windows should not be used for entering amounts on Schedule K. Also, SA windows cannot be used for any Schedule K line with a zero balance.
Removing a Partner from Allocation
Enter 0 (zero) for any partner to remove the partner from the pro-rata distribution calculation.
When you calculate the return, any amounts remaining un-allocated will be allocated to the partners based on prorata calculations of partners’ percentage as entered on the K1 screen.
Recalculation of Section L
In prior-year software, if an override was entered on the K1 screens or using the old SA screen, Section L, “Partner’s capital account analysis,” of the partner’s Schedules K-1 was not recalculated using the overridden totals. An entry was required in the Other adjustments field of the Section L to reconcile the ending capital. Starting in Drake15, Section L is recalculated based on the overrides entered on the new SA window.
See Partners Special Allocations (1065) for a video demonstration of this process.
Special Allocations in Prior Years
2014 and 2013 Software
Use the SA (Special Allocations) screen to allocate amounts for partners that differ from their stated percentage of interest in the 1065. Beginning with the 2013 software, enter only the percentage of the allocation per partner and only those partners who are receiving an allocation. There is no longer a need to enter a percentage for every partner. Dollar amounts no longer can be entered.
2012 and Earlier Software
Use the SA (Special Allocations) screen to allocate amounts for partners that differ from their stated percentage of interest in the 1065. Partner allocations can be entered as a dollar amount or percentage for each partner. For amounts to flow properly from the SA screen, all partners must be included, even if a partner receives a zero allocation.