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New Jersey uses the federal distribution amounts entered on federal Screen Ms to complete Schedule NJ K-1, Part II, line 8 - Distributions, and Part III, Line 6 - Distributions. If Distributions were not made on a pro rata basis, then they must be forced in View > Shareholder Information > Either the federal Other Info tab, or in the New Jersey tab. If any shareholder has forced their amount of distributions in View > Shareholder Information > Federal Other Info tab, then all shareholders must force their distributions here, unless any shareholder has their distributions forced in View > Shareholder Information > New Jersey tab, at which time all shareholders must force their distributions in this tab instead, in order for their distributions to properly flow to Schedule NJ K-1, Parts II and III.

New Jersey also follows similar rules as the federal return whereby distributions on a default basis are not permitted to reduce AAA below zero unless the client has elected to permit this on Screen Ms in the Allow distributions to reduce AAA below zero field.

Related topic: 1120 New Jersey frequently asked questions

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