To enter the income items from Schedule K-1 (Form 1120-S) in TaxSlayer ProWeb, from the Federal Section of the tax return (Form 1040) select:
- Income
- Other Income
- K-1 Earnings
- Schedule K-1 Form 1120-S - Select the pencil icon to edit the K-1.
- Income
Part III - Shareholder's Share of Current Year
Income, Deductions, Credits, etc.
Actively Managed Passive Loss Carryover
$Enter here as a positive number the unallowed loss, if any, as shown on last year's Form 8582 Part VII column (c) for this entity. This amount will flow to Form 8582 to determine the amount allowed this year, if any.
Disposition Gain/Loss
$An entry here assumes the taxpayer has sold their interest in the corporation and you have checked the box in the Entity Information menu for "Entire Interest in Investment has been disposed". In the "Carry Gain/Loss to" menu below, if you have selected "Schedule D" the amount will automatically flow to Form 8949 as a long-term gain or loss and from there to Schedule D. If you have selected "Form 4797", you will need to make the entry in Form 4797.
Other Passive Loss Carryover
$Enter here as a positive number the unallowed loss, if any, as shown on last year's Form 8582 Part VII column (c) for this entity. This amount will flow to Form 8582 to determine the amount allowed this year, if any.
Carry Gain/Loss to
If the taxpayer sold their interest in the S corporation, select Schedule D. If the S corporation sold assets that had previously claimed the section 179 deduction and had passed it through to the shareholder (reported in Box 17 with code K), select Form 4797. If Form 4797, you will need to make the entry in Form 4797 using the information provided by the S corporation regarding the asset(s) sold.
1 - Ordinary Business Income (Loss)
$The amount in Box 1 will be treated as passive if the check box for "This K-1 is from a passive entity" in the Entity Information menu is checked, otherwise it will be treated as nonpassive. Nonpassive income and loss flows to Schedule E, while passive income and loss flows to Form 8582 to determine the portion allowed to flow to Schedule E, if any.
2 - Net Rental Real Estate Income (Loss)
$How the amount entered in Box 2 is treated depends on which of the two Box 2 check boxes in the Entity Information menu was checked, if any:
- "There is an amount on line 2 of the K-1 and this is a non-passive entity and you materially participate." - If this box is checked, the Box 2 income or loss will be reported on Schedule E.
- "There is an amount on line 2 of the K-1 and you actively participate." - The income or loss will be reported on Form 8582 to determine the allowed portion, if any.
- Neither box is checked - If neither of the two Box 2 check boxes is checked, the income or loss will flow to Form 8582 to determine the allowed portion, if any.
3 - Other Net Rental Income (Loss)
$The amount in Box 3 is a passive activity amount for all shareholders. If it's a loss, it will flow to Form 8582 Part V and be subject to passive activity limitations. If it's a gain, it will either flow to Form 8582 Part V if there are other similar losses, or it will flow to Schedule E Part II.
4 - Interest Income
$Interest is portfolio income, and any amount entered here will flow to Schedule B.
5A - Ordinary Dividends
$Dividends are portfolio income, and any amount entered here will flow to Schedule B.
5B - Qualified Dividends
$Dividends are portfolio income, and any amount entered here will flow to Schedule B.
6 - Royalties
$Royalties are portfolio income, and any amount entered here will flow to Schedule E Part I.
7 - Net Short-Term Capital Gain (Loss)
$Capital gain/loss is portfolio income, and any short-term gain or loss flows to Schedule D Part I.
8A - Net Long-Term Capital Gain (Loss)
$Capital gain/loss is portfolio income, and any long-term gain or loss flows to Schedule D Part II.
8B - Collectibles (28%) Gain (Loss)
$Collectibles gain/loss is portfolio income, and any amount entered flows to the 28% Rate Gain Worksheet and from there to Schedule D.
8C - Unrecaptured section 1250 Gain
$Unrecaptured section 120 gain is portfolio income, and any amount entered flows to the Unrecaptured Section 1250 Gain Worksheet and from there to Schedule D.
9 - Net Section 1231 Gain (Loss)
$Net Section 1231 gain/loss is portfolio income. Section 1231 property is real or depreciable property owned for more than a year. Any gain or loss is reported on Form 4797 unless the amount is a loss and is indicated as passive, in which case it will be reported on Form 8582 Part V.
Check if the section 1231 gain(loss) is passive - Check this box if the taxpayer did not materially participate in the business activity that gave rise to the section 1231 gain or loss.
10 - Other Income (loss)
10A - Other Portfolio Income (Loss)
The corporation held a residual interest in a real estate mortgage investment conduit (REMIC) and should have provided the shareholder with a statement showing their share of taxable income (or net loss), excess inclusion, and section 212 expenses.
REMIC income (carries to schedule E line 38d)
$The amount entered will carry to Schedule E line 38(d).
Excess inclusion (carries to schedule E line 38c)
$The amount entered will carry to Schedule E line 38(c).
Section 212 expenses (carries to schedule E line 38e)
$The amount entered will carry to Schedule E line 38(e).
10B - Involuntary conversions
The amount entered is for reference purposes only and does not carry to any form. This amount represents the net gain (loss) from involuntary conversions due to casualty or theft. Report on Form 4684.
10C - Section 1256 contracts and straddles
The amount entered is for reference purposes only and does not carry to any form. This amount represents the gain or loss on section 1256 contracts marked to market. It should be reported in Part I of Form 6781.
10D - Mining exploration costs recapture
The amount entered is for reference purposes only and does not carry to any form. The corporation will provide the taxpayer a statement that shows the information needed to recapture certain mining exploration costs. If the taxpayer has been deducting depletion from the mining activity, then the recapture amount needs to be entered as Other Income.
10E - Section 951A(a) income inclusions
Enter this under Other Income and from the dropdown menu select "Section 951A(a) inclusion". This income is the taxpayer's share of the corporation's global intangible low-taxed income (GILTI).
10F - Inclusions of subpart F income
10G - Section 951(a)(1)(B) inclusions
10I - Gain (loss) from disposition of oil, gas, geothermal, or other mineral properties
The amount entered is for reference purposes only and does not carry to any form. Enter this on Form 4797. The K-1 should have a statement attached providing a description of the property, the taxpayer's share of the adjusted basis of the property (other than oil and gas), the amount realized from its disposition, and the taxpayer's share of intangible drilling costs, development costs, and mining exploration costs (section 59(e) expenditures) passed through for the property. Add these three costs to the adjusted basis if the taxpayer chose to capitalize them rather than deduct them.
10J - Recoveries of tax benefit items
The amount entered is for reference purposes only and does not carry to any form. Enter this under Other Income and from the dropdown menu select "Other Income", then enter a description (25 characters maximum), and the amount. A tax benefit item is an amount the taxpayer deducted in a prior tax year that reduced their income tax, so enter the amount to the extent it reduced tax in the prior year.
10K - Gambling gains and losses
The amount entered is for reference purposes only and does not carry to any form. How the gain or loss is entered depends on whether the corporation was engaged in the trade or business of gambling:
- If not engaged in the trade or business of gambling, enter gambling gains and losses both in "Other Gambling Income not reported on W-2G " under the Other Compensation menu. Winnings will be reported on Schedule 1 (Form 1040) line 8b, and the losses will be reported on Schedule A as an "other itemized deduction".
- If engaged in the trade or business of gambling, make one entry (if only winnings or losses is reported) or two entries (if both winnings and losses are reported) for the gambling activity in the "Schedule K-1 Form 1120S" menu. Enter the amount of winnings and/or losses in Box 1 "Ordinary Business Income (Loss)".
10M - Gain eligible for section 1045 rollover (replacement stock purchased by the corporation)
The amount entered is for reference purposes only and does not carry to any form. Report on Form 8949. See the Schedule D instructions here under the heading "Rollover of Gain From QSB Stock" for information on how to enter. The S corp should have provided information about the gain, including the name of the corporation that issued the QSB stock, the taxpayer's share of the corporation's adjusted basis and sales price of the QSB stock, and the dates the QSB stock was bought and sold. You'll need to ensure the taxpayer qualifies for the rollover.
10N - Gain eligible for section 1045 rollover (replacement stock not purchased by the corporation)
The amount entered is for reference purposes only and does not carry to any form. Report on Form 8949. See the Schedule D instructions here under the heading "Rollover of Gain From QSB Stock" for information on how to enter. The S corp should have provided information about the gain, including the name of the corporation that issued the QSB stock, the taxpayer's share of the corporation's adjusted basis and sales price of the QSB stock, and the dates the QSB stock was bought and sold. You'll need to ensure the taxpayer qualifies for the rollover, including having purchased other QSB stock during the 60-day period that began on the date the QSB stock was sold by the corporation.
10O - Sale or exchange of QSB stock with section 1202 exclusion
The amount entered is for reference purposes only and does not carry to any form. Report on Form 8949. See the Schedule D instructions here under the heading "Exclusion of Gain on Qualified Small Business (QSB) Stock" for information on how to enter. The S corp should have provided information including the name of the corporation that issued the QSB stock, the taxpayer's share of the corporation's adjusted basis and sales price of the QSB stock, and the dates the QSB stock was bought and sold. You'll need to ensure the taxpayer qualifies for the exclusion.
10S - Non-portfolio capital gain (loss)
The amount entered is for reference purposes only and does not carry to any form. Box 10 with code S represents an amount of short- or long-term capital gain or loss that isn't portfolio income. For example, gain or loss from the disposition of nondepreciable personal property used in a trade or business activity of the corporation. If short-term, report it in Box 7, adding to the amount already there, if any. If long-term, report it in Box 8a, adding to the amount already there, if any.
10ZZ - Other income (loss)
The amount entered is for reference purposes only and does not carry to any form. You will need to refer to the statement the corporation provided regarding the nature of this income to determine where it should be entered in the return.
11 Section 179 Deduction (in this menu tax years 2024 and prior)
$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).
Note: This is a brief guide on entering boxes 1 through 11 of Schedule K-1 (Form 1120-S) into TaxSlayer ProWeb. This is not intended as tax advice.
Additional Information:
IRS: Shareholder's Instructions for Schedule K-1 (Form 1120-S)
ProWeb: Form 1040 - Schedule K-1 (Form 1120-S) - Overview
ProWeb: Form 1040 - Schedule K-1 (Form 1120-S) - Entity Information
ProWeb: Form 1040 - Schedule K-1 (Form 1120-S) - Other Deductions
ProWeb: Form 1040 - Schedule K-1 (Form 1120-S) - Credit and Other Information