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If you have an amount in Box 13, Code J of your Partnership Schedule K-1 for Sec 59(e)(2) expenditures, the information will be reported on Schedule E, Page 2. You can deduct these expenditures in full or you can elect to amortize them.

Per the Partner's Instructions for Schedule K-1 (Form 1065), page 10:

Box 13. Other Deductions 
Code J. Section 59(e)(2) expenditures. 
On an attached statement, the partnership will show the type and the amount of qualified expenditures for which you may make a section 59(e) election. The statement will also identify the property for which the expenditures were paid or incurred. If there is more than one type of expenditure, the amount of each type will also be listed.

If you deduct these expenditures in full in the current year, they are treated as adjustments or tax preference items for purposes of alternative minimum tax. However, you may elect to amortize these expenditures over the number of years in the applicable period rather than deduct the full amount in the current year. If you make this election, these items are not treated as adjustments or tax preference items.

Under the election, you can deduct circulation expenditures ratably over a 3-year period. Research and experimental expenditures and mining exploration and development costs can be amortized over a 10-year period. Intangible drilling and development costs can be amortized over a 60-month period. The amortization period begins with the month in which such costs were paid or incurred.
 
Make the election on Form 4562. If you make the election, report the current year amortization of section 59(e) expenditures from Part VI of Form 4562 on line 28 of Schedule E (Form 1040). If you do not make the election, report the section 59(e)(2) expenditures on line 28 of Schedule E (Form 1040) and figure the resulting adjustment or tax preference item (see Form 6251, Alternative Minimum Tax-Individuals). Whether you deduct the expenditures or elect to amortize them, report the amount on a separate line in column (h) of line 28 if you materially participated in the partnership activity. If you didn't materially participate, follow the Instructions for Form 8582 to figure how much of the deduction can be reported in column (f).


Regardless of whether you choose to deduct the expenditures in full in the current year or amortize over a longer period, the navigation steps to enter the information in the TaxAct® program are as follows:
  1. From within your TaxAct return (Online or Desktop), click on the Federal tab. On smaller devices, click the menu icon in the upper left-hand corner, then select Federal
  2. Click Business Income to expand the category and then click Partnership income (Form 1065 Schedule K-1)
  3. Click Add to create a new copy of the form or click Review to review a form already created
  4. Click Continue or No until you reach the screen Partnership - Schedule K-1 Information
  5. Check the box for Box 13 - Other deductions
  6. Click Continue until you reach the screen Partnership - Other Deductions, then click Yes
  7. Click Continue until you reach the screen Partnership - Other Deductions - Section 59(e)(2) Expenditures, then click Yes
  8. Click Add to create a new copy of the form or click Review to review a form already created
  9. On the following screen, you will want to check the box next to the applicable expenditure type and enter the amount. If you wish to elect to amortize this expenditure rather than deduct the amount in full, check the box and enter the additional amortization information.
When choosing to deduct the expenditures, you will also need to figure the resulting adjustment or tax preference item on Form 6251 Alternative Minimum Tax. Form 6251 can be accessed through the Taxes topic in the Federal Q&A or through the Forms List in the desktop version of the software. Click the Forms button to access the Forms List.

For additional assistance on the entries needed on any screen, click IRS Form Instructions on the right side of the screen.

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