To enter the deduction items from Schedule K-1 (Form 1065) in TaxSlayer ProWeb, from the Federal Section of the tax return (Form 1040) select:
- Income
- Other Income
- K-1 Earnings
- Schedule K-1 Form 1065 - Select the pencil icon to edit the K-1.
- Other Deductions
Part III - Partner's Share of Current Year
Income, Deductions, Credits, etc.
Deductions
13 - Section 179 Deduction
$The amount of Section 179 deduction the taxpayer is allowed to deduct is subject to the dollar limitation and the business income limitation. You will need to calculate the amount the taxpayer is allowed to deduct, and if it's less than the amount on the K-1 enter only the allowed amount. The amount entered will flow to Schedule E line 28 column (j).
13 - Other Deductions
13A - Cash contributions 60%
Enter the amount, and it will flow to Schedule A line 11 subject to the 60% AGI limitation.
13B - Cash contributions 30%
Enter the amount, and it will flow to Schedule A line 11 subject to the 30% AGI limitation.
13C - Noncash contributions (50%)
The amount entered is for reference purposes only and not posted to Schedule A. Enter this in Schedule A (Itemized Deductions) under Gifts to Charity. Where you make the entry depends on its amount:
- If $500 or less, under Non-Cash Gifts to Charity enter the amount in the field "Non-Cash Contributions Less Than or Equal to $500".
- If more than $500, enter the information about the donation under the menu Non-Cash Donations (more than $500) to complete Form 8283 for the donation. There should be information accompanying the K-1 giving the details needed to complete Form 8283.
Additionally, enter information about the partnership under Non-Cash Contributions from Pass Through Entities.
13D - Noncash contributions (30%)
The amount entered is for reference purposes only and not posted to Schedule A. Enter this in Schedule A (Itemized Deductions) under Gifts to Charity. Where you make the entry depends on its amount:
- If $500 or less, under Non-Cash Gifts to Charity enter the amount in the field "Non-Cash Contributions Less Than or Equal to $500".
- If more than $500, enter the information about the donation under the menu Non-Cash Donations (more than $500) to complete Form 8283 for the donation. There should be information accompanying the K-1 giving the details needed to complete Form 8283.
You also need to make two additional entries:
- Under Non-Cash Contributions from Pass Through Entities, enter information about the partnership.
- Under Limitation on Charitable Contributions Deduction, enter the amount in the field "How much of your total contributions were gifts (excluding capital gain property) donated to organizations that were not qualifying 50% Limit Organizations?".
13E - Capital gain property to a 50% limit organization (30%)
The amount entered is for reference purposes only and not posted to Schedule A. Enter this in Schedule A (Itemized Deductions) under Gifts to Charity. Where you make the entry depends on its amount:
- If $500 or less, under Non-Cash Gifts to Charity enter the amount in the field "Non-Cash Contributions Less Than or Equal to $500".
- If more than $500, enter the information about the donation under the menu Non-Cash Donations (more than $500) to complete Form 8283 for the donation. There should be information accompanying the K-1 giving the details needed to complete Form 8283.
You also need to make two additional entries:
- Under Non-Cash Contributions from Pass Through Entities, enter information about the partnership.
- Under Limitation on Charitable Contributions Deduction, enter the amount in the field "How much of your total contributions were gifts of capital gain property to organizations that were not qualifying 50% Limit Organizations?".
13F - Capital gain property (20%)
The amount entered is for reference purposes only and not posted to Schedule A. Enter this in Schedule A (Itemized Deductions) under Gifts to Charity. Where you make the entry depends on its amount:
- If $500 or less, under Non-Cash Gifts to Charity enter the amount in the field "Non-Cash Contributions Less Than or Equal to $500".
- If more than $500, enter the information about the donation under the menu Non-Cash Donations (more than $500) to complete Form 8283 for the donation. There should be information accompanying the K-1 giving the details needed to complete Form 8283.
You also need to make two additional entries:
- Under Non-Cash Contributions from Pass Through Entities, enter information about the partnership.
- Under Limitation on Charitable Contributions Deduction, enter the amount in the field "How much of your total contributions were gifts of capital gain property to organizations that were not qualifying 50% Limit Organizations?".
13G1 - Cash contributions (100%)
The amount entered is for reference purposes only and not posted to Schedule A. See 13G2 below.
13G2 - Noncash contributions (100%)
The amount entered is for reference purposes only and not posted to Schedule A. This amount represents the taxpayer's share of qualified conservation contributions. A qualified conservation contribution is a contribution of a qualified real property interest to a qualified organization to be used only for conservation purposes. (This contribution is not included in the amount reported in Box 13 code C, if any.)
If the taxpayer is a farmer or rancher, they qualify for a 100% AGI limitation for this contribution, otherwise the deduction for this contribution is subject to a 50% AGI limitation.
Use the information supplied by the partnership about the contribution to determine whether to enter it as a cash or noncash contribution.
In addition to the above entry, three additional entries need to be made in Schedule A (Itemized Deductions):
- If more than $500, enter the information about the donation under the menu Non-Cash Donations (more than $500) to complete Form 8283 for the donation. The corporation should have provided a copy of its Form 8283 for this contribution giving the details needed to complete Form 8283.
- Under Non-Cash Contributions from Pass Through Entities, enter information about the partnership.
- Under Limitation on Charitable Contributions Deduction, enter the amount in either "Qualified Conservation Contributions Subject to 100% AGI" (if the taxpayer is a farmer) or "Any Qualified Conservation Contributions Not Subject to 100% AGI" (if the taxpayer is not a farmer).
13H - Investment interest expense
Enter the amount, and it will flow to line 1 of Form 4952, Investment Interest Expense Deduction. Form 4952 will be included in the return if an interest deduction calculates.
13I - Deductions - Royalty Income
Enter the amount, and it will flow to Schedule E Part I for the royalty income in Box 7 on this K-1.
13J - Section 59(e)(2) expenditures
The amount entered here is for reference purposes only and not posted to any form. The partnership should have provided a statement providing details about the expenditures, identifying the property for which the expenditures were paid or incurred and listing the amount of each type, if there is more than one type of expenditure.
Rather than deduct these expenditures in full in the current year, under section 59(e) the taxpayer can elect to amortize their pro rata share of the expenditures over 10 years (or 3 years for circulation expenditures). The deduction is taken beginning with the tax year in which the expenditures were made (or for intangible drilling and development costs, over the 60-month period beginning with the month in which such costs were paid or incurred).
If the taxpayer chooses to deduct these expenditures in full in the current year, they will be treated as adjustments or tax preference items for AMT purposes. Otherwise, if the taxpayer elects to amortize these expenditures rather than deduct the full amount in the current year, they aren't treated as adjustments or tax preference items.
If the taxpayer chooses not to make the election, you will need to make two entries:
- Create a second K-1 entry for this partnership, and enter the amount of the deduction as a negative in Box 1. If the taxpayer didn't materially participate in the partnership activity, in Part I check the box for "This K-1 is from a passive entity".
- In the Alternative Minimum Tax menu (Form 6251) under Other Taxes, enter the difference between the amount allowed for AMT purposes and the amount allowed for regular tax purposes. (Research and experimental costs deducted under section 174(a) for regular tax purposes generally must be amortized for AMT purposes over 10 years beginning with the year the costs were paid or incurred.)
If the taxpayer chooses to make the election under section 59(e) to amortize the expenditures, create a second K-1 entry for this partnership and enter this year's amount of the amortized deduction as a negative in Box 1. If the taxpayer didn't materially participate in the partnership activity, in Part I check the box for "This K-1 is from a passive entity".
13K - Excess business interest expense
The amount entered is for reference purposes only and not posted to any form. The partnership should have provided additional information needed to complete Form 8990, Limitation on Business Interest Expense Under Section 163(j), to figure the amount of business interest expense the taxpayer/partner can deduct in the current year and the amount to carry forward to next year..
Form 8990 is not included in TaxSlayer ProWeb but must be completed outside the partner's individual income tax return. A fill-in copy of Form 8990 is available at the IRS website here, and its instructions are available here. Additionally, the IRS has provided a lengthy FAQ here regarding the limitation on the deduction for business interest expense. Before attempting to complete the form, read the IRS instructions and FAQ to determine if the taxpayer needs to complete the form.
The partner’s basis in their partnership interest at the end of the tax year is reduced (but not below zero) by the amount of excess business interest allocated to the partner for the tax year, even if the partner isn’t allowed a deduction for the allocated excess business interest in the year of the basis reduction.
If the partner disposes of a partnership interest in which the basis has been reduced before all of the allocated excess business interest was used, the partner increases their basis immediately before the sale for the amount not yet deducted.
13L - Deductions - portfolio income (other)
The amount entered will flow to Schedule A as an Other Itemized Deduction.
13M - Amounts paid for medical insurance
Three fields are provided for entry depending on how the medical insurance payments are being treated. Note that amounts can be entered in either or both of the first two fields.
Medical insurance to carry to SE health insurance adjustment
An amount can be entered here if the partner had net earnings from self-employment reported on Schedule K-1 in Box 14 with code A. The amount entered will flow to Schedule 1 Part II as an adjustment to income.
Medical insurance to carry to schedule A, line 1
An amount can be entered here if not entered in the previous field, e.g., if the partner did not have net earnings from self-employment or if the partner is itemizing their deductions.
Medical insurance (must be manually entered on appropriate form)
The amount entered is for reference purposes only and not posted to any form. Generally an amount need not be entered here if either or both of the the previous two fields were used and total to the amount on the K-1.
13N - Educational assistance benefits
The amount entered is for reference purposes only and not posted to any form. The amount of educational assistance benefits the taxpayer can deduct is limited. For tax years prior to 2026, the maximum amount of educational assistance benefits that can be deducted is $5,250. For tax years after 2025, the maximum amount that can be deducted is adjusted for inflation. See the partnership instructions for the maximum amount that can be deducted for the tax year you are entering.
To enter this deduction, create a second K-1 entry for this partnership, and enter the amount of the deduction up to the maximum as a negative in Box 1. If the taxpayer didn't materially participate in the partnership activity, in Part I check the box for "This K-1 is from a passive entity".
If the amount on the K-1 exceeds the maximum allowable, the difference can be claimed as a credit on Form 8863.
13O - Dependent care benefits
The amount entered is for reference purposes only and not posted to any form. This amount is reported on Form 2441.
You'll complete Form 2441 in the usual way, entering information about the care facility, selecting the child being cared for, and entering the amount of the benefit paid for the child. After continuing past that section, on the Child Care Questions page you will be asked "Did you receive any dependent care benefits from your employer that are not reported on your W-2?" Select Yes, then enter the amount paid for the dependent in the field headed "Benefits received from sole proprietorship or partnership".
13P - Preproductive period expenses
The amount entered is for reference purposes only and not posted to any form. The taxpayer may be able to deduct preproductive period expenses in the current year, or they may need to capitalize them under section 263A. See Pub. 225, Farmer’s Tax Guide, and Regulations section 1.263A-4 for details.
13R - Pensions and IRAs
The partnership should have provided information on payments made on the taxpayer's behalf to an IRA, a qualified plan, a simplified employee pension (SEP), or a SIMPLE IRA plan.
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If the payments were made to an IRA, enter them in the "Traditional IRA Contributions" menu under the Adjustments menu. You'll also need to indicate if the taxpayer is also covered by a retirement plan, e.g., qualified pension, profit-sharing (including 401(k)), annuity, SEP, SIMPLE, etc.
See the instructions for Schedule 1 (Form 1040) line 20 for more info on figuring the taxpayer's IRA deduction. In the printed return, the allowable deduction is figured on the IRA Deduction Worksheet.
- If the payments were made to a qualified plan, SEP, or SIMPLE IRA, enter them in the "Contributions to SEP, Simple, and Qualified Plans" menu under the Adjustments menu.
If the payments to a qualified plan were to a defined benefit plan, the partnership should have provided a statement showing the amount of the benefit accrued for the current tax year.
13S - Reforestation expense deduction
The amount entered is for reference purposes only and not posted to any form. The partnership should have provided a statement that describes the qualified timber property for these reforestation expenses. The taxpayer's expense deduction is limited to $10,000 ($5,000 if married filing separately) for each qualified timber property, including the taxpayer's share of the partnership’s expense and any reforestation expenses they paid separately or incurred during the tax year.
Create a second K-1 entry for this partnership, and enter the amount of the deduction as a negative in Box 1. If the taxpayer didn't materially participate in the partnership activity, in Part I check the box for "This K-1 is from a passive entity".
13V - Section 743(b) negative income adjustments
The amount entered is for reference purposes only and not posted to any form. The partnership should have provided a statement reporting the net negative income adjustment resulting from all section 743(b) basis adjustments.
Create a second K-1 entry for this partnership, and enter the amount of the deduction as a negative in Box 1. If the taxpayer didn't materially participate in the partnership activity, in Part I check the box for "This K-1 is from a passive entity".
13W - Soil and water conservation
The amount entered is for reference purposes only and not posted to any form. The amount deductible under IRC section 175(a) for any taxable year can't exceed 25 percent of the gross income derived from farming during the taxable year. Any excess not deductible in the current year can be carried forward and deducted along with the expenses paid or incurred in subsequent years, subject to the same 25% limitation.
Create a second K-1 entry for this partnership, and enter the amount of the deduction as a negative in Box 1. If the taxpayer didn't materially participate in the partnership activity, in Part I check the box for "This K-1 is from a passive entity".
13X - Film, television, and theatrical production expenditures
The amount entered is for reference purposes only and not posted to any form. The corporation should have provided a statement describing the film, television, live theatrical, or qualified sound recording production generating these expenses. See section 181(a)(2) for dollar limitations that may apply.
Note that section 181 expired at the end of 2025 and thus applies to expenditures incurred in 2025 or prior.
Create a second K-1 entry for this partnership, and enter the amount of the deduction as a negative in Box 1. If the taxpayer didn't materially participate in the partnership activity, in Part I check the box for "This K-1 is from a passive entity".
13Y - Expenditures for removal of barriers
The amount entered is for reference purposes only and not posted to any form. This amount represents expenditures for the removal of architectural and transportation barriers to the elderly and disabled that the corporation elected to treat as a current expense. The deductions are limited by section 190(c) to $15,000 per year from all sources.
Create a second K-1 entry for this partnership, and enter the amount of the deduction as a negative in Box 1. If the taxpayer didn't materially participate in the partnership activity, in Part I check the box for "This K-1 is from a passive entity".
13Z - Itemized deductions
The amount entered is for reference purposes only and not posted to any form. The K-1 should have a statement attached explaining this deduction. Report it in the appropriate place on Schedule A.
13AA - Contributions to a capital construction fund (CCF)
The amount entered is for reference purposes only and not posted to any form. The IRS instruction is to subtract the amount from the taxable income on Form 1040 line 15, and in the margin to the left of line 15 enter “CCF” and the amount of the deduction. As this is a manual correction of Form 1040, a Schedule K-1 with an amount in Box 13 with code AA cannot be completed in TaxSlayer ProWeb.
13AB - Penalty on early withdrawal of savings
The amount entered is for reference purposes only and not posted to any form. Enter this amount in the Adjustments menu under Penalty on Early Withdrawal of Savings or Certificate of Deposit (CD).
13AC - Interest expense allocated to debt-financed distributions
The amount entered is for reference purposes only and not posted to any form. Where this amount is to be entered in the tax return depends on how the taxpayer used the distributed debt proceeds.
If the distributed debt proceeds were used in a trade or business, create a second K-1 entry for this partnership with the partnership's name plus "interest expense", and enter the amount of the deduction as a negative in Box 1. If the taxpayer didn't materially participate in the partnership activity, in Part I check the box for "This K-1 is from a passive entity".
If the distributed debt proceeds were used in an investment activity, report the interest expense on Form 4952.
If the distributed debt proceeds were used for personal reasons, the interest expense is not deductible.
13AD - Interest expense on working interest in oil or gas
The amount entered is for reference purposes only and not posted to any form. This amount represents the interest paid or accrued on debt properly allocable to the taxpayer's share of a working interest in any oil or gas property (if the taxpayer's liability isn’t limited).
How the interest expense is reported depends on the taxpayer's participation in the oil and gas activity:
- If the taxpayer didn’t materially participate in the oil and gas activity, this interest is investment interest reportable on Form 4952. In TaxSlayer ProWeb, enter it in Form 4952 in the field labeled "Interest expense on investment debt paid or accrued in 20xx".
- If the taxpayer materially participated in the oil and gas activity, this interest is trade or business interest. Create a second K-1 entry for this partnership with the partnership's name plus "interest expense", and enter the amount of the deduction as a negative in Box 1.
13AE - Deductions - portfolio income
The amount entered is for reference purposes only and not posted to any form. This amount represents section 212 investment-related expenses. These expenses are not deductible by an individual partner, and they reduce the partner's basis in the partnership.
13ZZ - Other deductions
The amount entered is for reference purposes only and not posted to any form. The K-1 should have a statement attached explaining this deduction. If it is deductible, report it in the appropriate form or schedule.
Note: This is a guide on entering the Deduction items from Schedule K-1 (Form 1065) into TaxSlayer ProWeb. This is not intended as tax advice.
Additional Information:
IRS: Partner's Instructions for Schedule K-1 (Form 1065)
ProWeb: Form 1040 - Schedule K-1 (Form 1065) - Overview
ProWeb: Form 1040 - Schedule K-1 (Form 1065) - Entity Information
ProWeb: Form 1040 - Schedule K-1 (Form 1065) - Income
ProWeb: Form 1040 - Schedule K-1 (Form 1065) - Credit and Other Information