TurboTax can process your K-1, but it won't track your basis, catch §751 recapture, or warn you about state filing obligations. Here's how to enter it correctly — and what TurboTax won't tell you.
By Lucas Andersen — Last updated April 9, 2026
TurboTax Premier or Self-Employed is required for K-1 entry. TurboTax Free Edition and TurboTax Deluxe do not support Schedule K-1 (Form 1065). If you attempt to enter K-1 data in Deluxe, TurboTax will prompt you to upgrade before continuing. Both TurboTax Online Premier and TurboTax Desktop Premier support K-1 entry. Desktop is faster for multiple K-1s because it eliminates the page-load latency between entry screens. If you own three or more MLPs, Desktop saves meaningful time.
Open your return and navigate to Federal > Wages & Income > Schedule K-1 (Form 1065). TurboTax will ask whether you received a K-1. Select yes, then choose “Form 1065” (partnerships). Enter the partnership name exactly as printed on your K-1 (e.g., “Enterprise Products Partners, L.P.”), the EIN, and your partner number from Item D. For each additional K-1, click “Add another K-1” and repeat.
The table below maps each K-1 field to the exact TurboTax screen where you enter it, what value to use, and the most common error for that field.
| K-1 Field | TurboTax Screen | What to Enter | Common Error |
|---|---|---|---|
| Box 1 | Ordinary business income (loss) | Exact amount. Parentheses = negative. | Entering as positive when K-1 shows (loss) |
| Box 4a | Guaranteed payments — services | Usually $0 for public MLP unitholders | Confusing with Box 1 income |
| Box 5 | Interest income | Exact amount from K-1 | Omitting small amounts (<$1) |
| Box 13 | Other deductions (code W, etc.) | Enter each code separately on sub-screen | Entering total instead of per-code amounts |
| Box 19A | Distributions — cash | Total cash distributions for the year | Confusing with taxable income (it is not) |
| Item K | Partner’s share of liabilities | Recourse, qualified nonrecourse, nonrecourse | Skipping — TurboTax needs all three lines |
| Box 20 Code Z | §199A info — separate QBI screen after main entry | QBI amount from supplemental statement | Looking in Box 20 face instead of supplemental pages |
| Box 20 Code AH | §199A info — same QBI sub-screen | Additional §199A detail from supplemental | Ignoring because TurboTax doesn’t always prompt |
TurboTax asks: “Is this a publicly traded partnership?” Check yes for every exchange-listed MLP. This checkbox activates IRC §469(k), which isolates losses from this PTP into its own passive activity “canister.” EPD losses can only offset EPD income. ET losses can only offset ET income. Without this checkbox, TurboTax pools all passive activities together, allowing cross-PTP netting that the IRS does not permit. The result: overstated deductions, potential audit adjustment, and interest on the underpayment. See PTP passive loss rules for the full §469(k) explanation.
If you own Energy Transfer (ET), your tax package contains three K-1s: ET itself, USA Compression (USAC), and Sunoco LP (SUN). Each has a different EIN. In TurboTax, you must enter each as a separate K-1 — click “Add another K-1” three times. Each gets its own PTP checkbox. Each maintains its own suspended loss canister. This is the single most common TurboTax error for MLP investors: entering only one of the three, or combining the amounts onto a single K-1 entry.
TurboTax prompts for Box 20 codes (Z, AH, AB, etc.), but the actual data lives on the supplemental pages attached to your K-1 — not in Box 20 itself. Box 20 on the face of the K-1 typically shows only the code letter and “STMT” or a reference. Open the supplemental statement PDF and locate the §199A section to find Code Z (QBI) and Code AH amounts. TurboTax will display a sub-screen for each code after the main K-1 entry; enter the dollar amounts from the supplemental statement there.
If you sold MLP units during the tax year, TurboTax requires Form 8949 with a basis adjustment. Your broker’s 1099-B reports cost basis that is almost certainly wrong — it reflects your purchase price without any K-1 adjustments. You must calculate your IRS-adjusted basis and enter it using adjustment code B (basis reported to IRS is incorrect) or E (basis reported is incorrect and gain/loss is short-term). See why your broker’s cost basis is wrong.
TurboTax also does not auto-generate the §751 ordinary/capital split. Your final K-1 includes a Sales Schedule showing the §751 ordinary income amount. You must manually split the gain: §751 portion as ordinary income on Form 4797, remainder as capital gain on Form 8949. TurboTax has no screen that calculates this split for you.
TurboTax is a form-filler, not a tax advisor. It will not: (1) track your IRS-adjusted basis across years — use the K-1 Basis Tracker; (2) warn you when basis approaches zero; (3) calculate or display §751 recapture amounts; (4) file non-resident state returns for MLP state-source income — states like Louisiana, Ohio, and Kentucky require separate filings; (5) verify your 1099-B cost basis against the K-1-adjusted basis. For any of these, you need an independent calculation outside TurboTax.