17113: 1120-S - Line 17 Code AC Change (Drake20 and future)

Line 17, code AC on Schedule K-1 of Form 1120-S is used to report the gross receipts amount for Section 448(c). A shareholder needs this information to help determine if they are required to file Form 8990 (the gross receipts test).

Line 17, code AC is calculated by applying the shareholder's allocation percentage to gross receipts or sales (line 1a) less returns and allowances (line 2) of Form 1120-S, page 1. To override this calculation, use line 17 AC Current year gross receipts for Section 448(c) override entry available on the K screen > Other Information tab.

The shareholder will use this amount when answering the question "Filer has average annual gross receipts less than $__million for the three prior years" on screen 8990 in the 1040 return. If Form 8990 is not required on the return, the code is for informational purposes only. Code AC can be entered on the K1S screen, line 17, but will not flow anywhere else the return. For more information, see the Form 8990 Instructions. 

In prior years, K1S, line 17, code AC was used to indicate Gross farming and fishing income. In Drake20 and future, code AD is now used for Gross farming and fishing income.