A special allocation on Form 1065 Schedule K-1 allows a partnership to allocate income, losses, or other tax items to partners in a manner that differs from their ownership percentages, based on the partnership agreement.

To make a special allocation for partners share of recourse/non-recourse debt, follow the steps below:

TaxAct Online

1. From within the Forms Manager, select Schedule K-1 from the Forms and Schedules dropdown.
2. Click the link at the bottom of Schedule K-1 to navigate to the special allocation worksheet.
3. A pop-up will display the supporting forms. Click Schedule K-1 Special Allocations to expand the dropdown and click Review next to the form.
4. From within the Schedule K-1 Allocations Worksheet, you can adjust the percentage amounts to allocate distributive share items under Partners share of liabilities.

Desktop

1. From within the Forms manager, select Schedule K-1 from the Forms and Schedules dropdown.
2. Click the link at the bottom of Schedule K-1 to navigate to the special allocation worksheet.
3. A pop-up will prompt you to select and open the supporting form.
4. From within the Schedule K-1 Allocations Worksheet, you can adjust the percentage amounts to allocate distributive share items under Partners share of liabilities.

Related Links

• Schedule K-1 (Form 1065) – Entering in Program
• Schedule K-1 (Form 1065) – Unreimbursed Partnership Expenses
• Partner’s Instructions for Schedule K-1 (Form 1065)
• Schedule K-1 (Form 1065)