Trying to understand K-1 with multiple sources of 199A income/loss

[Alex Murkes]

Hi everyone. I hope a kind soul will be able to point me in the right direction.

I'm not an RE professional and never will be, absolute majority of my income comes from W-2 and 1099s.  I have one rental single-family house, and I recently invest in several RE partnerships.

Last year I invested in a RE partnership that is a fund, which invests in deals from the same investment firm. The K-1 has the following incomes/losses:
Box 1: 335
Box 2: -2,128

It also has interest income (box 5), ordinary dividends (box 6a), and other deductions (box 13, code AE).

Then down below there is a list of all LLCs involved (the fund itself and LLCs it invested in), each listing Section 199A QBI attributed to that LLC (each LLC has its own EIN). It also states whether this income is included in Box 1, Box 2, or both (only the fund itself has both activities).

When adding all of these together (incomes - losses), I end up with -1,791. However, Box 1 - Box 2 = -1,793.

QUESTION 1: shouldn't these add up to the same number?

My understanding is that I need to create separate entries for Box 1 (ordinary income) and Box 2 (rental income), as if these came as two separate K-1s. Also, TurboTax is telling me to create a separate entry for each LLC. This will result in 10 entries total (2 for the fund itself, plus 8 other LLCs). This is very tedious but doable (provided I resolve Question 1).

QUESTION 2: am I really required to enter each LLC separately? If not required but only recommended, what will I lose if I don't do it?

Finally, it said somewhere that the K-1 attachments or notes should indicate how to split other numbers into these separate entries. There is nothing about this in my K-1.

QUESTION 3: how do I allocate other numbers across LLCs? My guess is that I can allocate interest and dividends entirely to the fund itself, splitting them probably makes no difference. What about the deduction in box 13?

Thank you for reading this far and for any insight you could share!

[Michael Plaks]

@Alex Murkes

...I hope a kind soul will be able to point me in the right direction...

You're looking for kind souls in the wrong place. This is a tax forum. We're a bunch of arrogant unhelpful a**s.  :)

Q1 - $2 is a rounding discrepancy, and you don't need to do all these calculations anyway.

Q2 - Yes, two K1 worksheets. One for Box 2, the other for boxes 1/5/6a

No, not really required to create 10 different worksheets. You basically do not lose anything - which is a short practical answer. No motivation for either of us to pursue a very long and very technical alternative answer.

Q3 - They will not make any difference anyway, but keep them on the worksheet linked to Box 1.