1065-US: Answering questions 3a and 3b on Schedule B (FAQ)

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Question

How do I answer Yes to Schedule B, Questions 3a and 3b?

Answer

UltraTax CS automatically answers Yes to Schedule B, Questions 3a and 3b and completes Schedule B-1 for any partner whose direct plus indirect profit, loss, or capital percentage at the end of the tax year is 50 percent or more. UltraTax CS uses the greater of the profit, loss, or capital percentage at the end of the year from Schedule K-1 as the direct percentage and uses the percentage entered in the Indirect percent for maximum profit, loss, or capital field in the Federal tab in the Partner Information window in Partner Data Entry as the indirect percentage.

UltraTax CS also answers Yes to Schedule B, Questions 3a and 3b and completes Schedule B-1 when there is data in the Entities owning, directly or indirectly, 50% or more of the partnership fields in Screen OthInfo.

Notes

  • UltraTax CS automatically transfers disregarded entity partners to Schedule B-1, Part II, Individuals and Estates Owning 50% or More of the Partnership. Mark the Report disregarded entity as corporation checkbox in the Federal tab in the Partner Information window in Partner Data Entry to report a disregarded entity partner on Schedule B-1, Part I, Entities Owning 50% or More of the Partnership.
  • UltraTax CS automatically transfers grantor trust partners to Schedule B-1, Part I, Entities Owning 50% or More of the Partnership. Mark the Report grantor trust as an individual checkbox in the Federal tab in the Partner Information window in Partner Data Entry to report a grantor trust partner on Schedule B-1, Part II, Individuals or Estates Owning 50% or More of the Partnership.

Related topic: Schedules B and B-1 FAQs (1065)

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