Has anyone used TurboTax to report QSBS exclusions from a K-1? I'm trying to figure out where exactly to enter this and if TurboTax can handle it properly. The software seems confused when I try to enter the QSBS exclusion code.

I went through this exact same situation last year with my partnership K-1 showing QSBS gains. The key thing to remember is that you absolutely need to report the full gain amount on Form 8949 first, then show the exclusion as an adjustment - don't just net it out on Schedule D. Here's what worked for me: On Form 8949 Part II, I listed the partnership as the source, entered the full long-term capital gain amount, then in column (f) I put the QSBS exclusion amount as a negative number (so if your exclusion is $158,000, you'd enter -158000). In column (g), use code "Q" to indicate it's a QSBS exclusion. The partnership has already verified all the Section 1202 requirements including the 5-year holding period and active business tests, so you can rely on their Box 11 Code O amount. Just make sure to keep your K-1 as supporting documentation. With your gain of $237,000 and exclusion of $158,000, you'll end up with $79,000 of taxable long-term capital gain flowing to Schedule D.

This thread has been incredibly helpful! I'm in a similar boat to the original poster - made about $6,400 in sports betting winnings this year across multiple apps and was confused about the reporting requirements. After reading everyone's advice, I have a follow-up question about timing: If I have outstanding bets that haven't settled yet as of December 31st, do those count toward this year's taxes or next year's? For example, I have a futures bet on the Super Bowl winner that I placed in October - if it wins in February, is that 2024 or 2025 income? Also, has anyone dealt with sportsbook promotions and bonuses? I received several "risk-free bet" credits and deposit match bonuses throughout the year. Are those considered taxable income when received, or only if I actually win using them? The record-keeping advice about the separate bank account is gold - definitely implementing that going forward. And thanks to everyone who shared those tools like taxr.ai and claimyr.com - seems like there are actually some good resources out there to help navigate this stuff properly.

This is such a timely discussion! I'm a CPA who specializes in gambling taxation, and I wanted to add a few key points that might help clarify things for everyone: **Record Keeping is Everything**: The IRS doesn't care whether sportsbooks report your winnings or not - YOU are responsible for reporting all gambling income. Keep detailed records including dates, amounts wagered, amounts won/lost, and the type of gambling. Screenshots of your betting history are your best friend. **State vs Federal Complications**: Don't forget that some states have entirely different rules. For example, some states tax gambling winnings at the source, while others follow federal guidelines. If you're betting in multiple states or live near state borders, this can get complex quickly. **The "Honor System" Reality**: While it might seem like an honor system since sportsbooks aren't reporting smaller wins, the IRS has increasingly sophisticated ways to detect unreported gambling income. They're particularly focused on this area given the explosion in legal sports betting. **Professional Gambler Status**: If your gambling activities are substantial and regular enough, you might be considered a professional gambler for tax purposes, which changes how you report income and deductions entirely. Bottom line: report everything, keep meticulous records, and when in doubt, consult a tax professional. The penalties for unreported gambling income far exceed the cost of proper compliance.

This thread has been incredibly helpful! I'm dealing with the exact same situation as the original poster. I have a single-member S-corp and was completely confused by the K-1 code changes this year. Based on what everyone's shared here, it sounds like I need to: 1. Create a Statement A that breaks down all my Section 199A components (business income, W-2 wages, qualified property) 2. Put "STMT" in Box 17 Code V to reference this statement 3. Make sure my tax software generates this automatically when I input the data I'm using TaxAct - has anyone used this software for the new K-1 format? Want to make sure it handles the Statement A generation properly before I file. The last thing I need is an IRS notice because I formatted something incorrectly! Thanks to everyone who shared their experiences and solutions. This community is a lifesaver during tax season.

As someone who's been through this exact maze with my single-member S-corp, I can confirm what everyone else has shared - the Statement A approach is definitely the way to go. I spent way too many hours trying to figure out the new coding system before finally getting it right. One thing I'd add that hasn't been mentioned yet: if you're using payroll software like QuickBooks or ADP for your S-corp wages, make sure the W-2 amounts you're reporting on Statement A match exactly what's on your actual W-2. I made the mistake of using a rounded number initially and it created a small discrepancy that my tax software flagged during the error check. Also, for anyone still struggling with this, the IRS has a decent FAQ buried on their website (Publication 1120-S instructions) that explains the Statement A requirements. It's not the clearest writing, but it does confirm that Code V should reference the statement rather than contain dollar amounts. The whole transition has been poorly communicated by the IRS, but at least we've all figured it out together! Thanks to everyone who shared their solutions - this thread should be bookmarked for next year's tax season.

Just wanted to thank everyone for the helpful responses! I was able to log into my IRS account and find the interest payment on my transcript using transaction code 776 like @Jade Lopez mentioned. It was exactly $14.23. For anyone else reading this thread, the transcript method really is the easiest way to find this information. I was overthinking it trying to hunt down that physical letter when the info was right there online all along. Now I can add it to my tax return properly. Really appreciate this community - saved me a lot of headache!

Great to see this thread helped so many people! Just wanted to add that if anyone is still struggling to navigate the IRS transcript system, there's actually a helpful guide right on the IRS website that walks you through each type of transcript and what information they contain. The Account Transcript is what you want for finding interest payments (transaction code 776), while the Record of Account Transcript shows a more detailed chronological view of your account activity. I made the mistake of looking at the wrong transcript type initially and couldn't find my interest payment. Also, keep in mind that if the IRS paid you interest in January-March of this year for a prior year refund delay, that interest is taxable income for the current tax year (2024), not the year the original refund was from. The timing of when you received the interest is what matters for tax reporting purposes.

This is such a common confusion point for new LLC owners! I went through the exact same thing when my business partner and I started our consulting LLC two years ago. The short answer is: with a standard two-member LLC (taxed as a partnership), you don't need formal payroll. You can take owner's draws as needed throughout the year. Just remember that you'll both be taxed on your 50% share of the business profits regardless of how much you actually take out. A few practical tips that would have saved me stress: - Set up a business bank account immediately and keep it completely separate from personal accounts - Track every draw you take (even a simple spreadsheet works) - Set aside about 25-30% of profits for taxes (self-employment tax is 15.3% plus regular income tax) - Consider getting an EIN from the IRS even if not required - it makes banking easier You'll each get a Schedule K-1 at tax time showing your share of profits/losses. The business itself doesn't pay income taxes, but you'll need to make quarterly estimated payments since no taxes are being withheld. Don't stress too much about getting everything perfect right away - you can always adjust as you learn! The important thing is to keep good records from day one.

Adding to the great advice already shared here - one thing that really helped us when we started our LLC was understanding the difference between "guaranteed payments" and regular draws. If you and your partner decide to take regular monthly amounts (like a salary), those are called guaranteed payments and get reported differently on your K-1s. But if you're just taking money out as needed based on cash flow, those are simple owner draws. Also, don't forget about the LLC's annual tax return (Form 1065)! Even though the LLC itself doesn't pay income tax, you still need to file this partnership return and issue K-1s to yourselves by March 15th (or get an extension). I learned this the hard way our first year when I thought we didn't need to file anything since "the LLC doesn't pay taxes." Pro tip: If your business has seasonal income fluctuations, consider making your quarterly estimated payments based on the "safe harbor" rule (pay 100% of last year's tax liability, or 110% if your AGI was over $150K). This helps avoid underpayment penalties even if your business income varies throughout the year.