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jgordosea
jgordosea, Enrolled Agent
Category: Tax
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Experience:  I've prepared all types of taxes since 1987.
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I bought into an ETF last spring and received a schedule K-1

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I bought into an ETF last spring and received a schedule K-1 Form 1065 after I submitted my 1040. Now, I have to fill out a 1040X. I have not done anything with the fund after purchasing it. 1) Do I have to re-submit all the previous forms submitted with my 1040 with the 1040X or just the form required for the information from the Schedule K-1. 2)Do I submit a Form 4797 or a Schedule D? 3) I used tax slayer for preparing my taxes and it gives me a series of check boxes:This K-1 is from a Passive Entity, There is an amount on line 2 of the K-1 and this is a NonPassive Entity and you Materially Participate, There is an amount on line 2 of the K-1 and you Actively Participate, All Investment is At-Risk, Entire Interest in Investment has been disposed, K-1 is from a Publicly Traded Partnership (PTP). I checked the last item as that was what was checked on the schedule K-1. Do I check the investment option too as that is what this was? 4) Do I have to resubmit my tax info to Wisconsin too?
Submitted: 5 years ago.
Category: Tax
Expert:  jgordosea replied 5 years ago.

Greetings,

 

1) Do I have to re-submit all the previous forms submitted with my 1040 with the 1040X or just the form required for the information from the Schedule K-1.

You only are required to submit the forms that changed when you redid your return for the omitted items; but often it is just as easy to submit an entire return and mark it something like: "Statement for 1040X, as amended" since most software will print the entire return more easily than just some forms. You are also sure to avoid missing a form that should have been sent using that method.

 

2)Do I submit a Form 4797 or a Schedule D?

Perhaps, but only if there were items on the 2008 Form 1065 (Schedule K-1)

that would require the form, such as lines 8,9 or 10.

 

3) I used tax slayer for preparing my taxes and it gives me a series of check boxes:This K-1 is from a Passive Entity, There is an amount on line 2 of the K-1 and this is a NonPassive Entity and you Materially Participate, There is an amount on line 2 of the K-1 and you Actively Participate, All Investment is At-Risk, Entire Interest in Investment has been disposed, K-1 is from a Publicly Traded Partnership (PTP). I checked the last item as that was what was checked on the schedule K-1. Do I check the investment option too as that is what this was?

Yes, all of your investment is at risk from the type of investment you have described so check that box as well.

4) Do I have to resubmit my tax info to Wisconsin too?

Wthout recomputing the state return after adding in the inadvertently omitted K-1 it is impossible to know whether or not any change would happen on that return.

 

If you did have any item that changed your tax due to Wisconsin you should, at least technically, amend that return as well. However, you would not be the first person that has decided that the pain and effort is not worth doing what you should for sending in an amended return. There is information sharing between state and federal tax authorities; but some tapayers would rather not go to the trouble of amending for minor differences in tax. There is the potential of interest and penalty on any amount not paid by the due date; but those amounts can be quite small when the tax difference is small.

 

I am not familiar with Taxslayer; but many online prgrams have the ability to compute and print an amended return; so that may be worth looking into or asking techinical support of that program what is available.

 

Best wishes.

 

Customer: replied 5 years ago.
Thank you. I spoke to Tax Slayer and they recommended that I fill out Form 6781 off of the IRS's website. They recommended that I fill in the 1040X manually since it will cost $20 to use tax slayer, but I'm leary to do this as I don't know the first thing about the 1040X and all the lines that I'll need to change from the original 1040, all because of one form (the schedule K). What would you recommend? I did have a loss reported in line 11 of the schedule K, ~$100 loss. So, the lines that you indicated were not filled in, but line 11 was. So, do I need to fill in Schedule D? This has totally screwed me up and confused me so sorry for the reply. Also, there are lines part of Part II section L of the Schedule K that have info in them (Capital contributed this year, current year increase, ending capital, etc), do I need to worry about reporting this information? Thanks again :-) I hope that your day is going well.
Expert:  jgordosea replied 5 years ago.

Hello again,

 

Indeed, Form 6781 is the correct form to use to report the Schedule K-1 11c amounts.

 

The amounts from Form 6781 are then carried to Schedule D so that form would be included in an amended return that has added a Form 6781.

 

Only the line 1-20 amounts need be reported and none of the information from line L has to be reported by the partner that gets a K-1.

 

If the only amount that will be reported on your Form 1040X is the loss to report on the Form 6781 (and carried to Schedule D) you will have little or no tax change and will be due back a small refund, at best.

 

There is no penalty if you decide it is not worth the trouble to amend the return(s) for the small refund.

 

I hope this clarifies for you.

Best wishes.

jgordosea, Enrolled Agent
Category: Tax
Satisfied Customers: 3000
Experience: I've prepared all types of taxes since 1987.
jgordosea and 4 other Tax Specialists are ready to help you
Customer: replied 5 years ago.
Yes. Thank you so much! Have a great night!

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