Help with Form K-1, Box 20, Code AG on my partnership tax return?

Hey everyone, I'm currently working through my taxes using TurboTax and hit a roadblock with my K-1 form. So I'm part of a small band that's set up as a general partnership (we play wedding gigs and small venues). With venues being closed for most of last year, we barely made any income, but I still got my K-1. When I'm entering the info, there's this Code AG in Box 20 that I've never seen before. The software is telling me I need to upgrade to their premium version for an extra $94.99 to handle this code. I really don't want to pay the upgrade fee for what was essentially a money-losing hobby last year. Does anyone know what Code AG actually means or if there's some other form I need to include? Is this something I can handle myself without paying for the premium upgrade? Any advice would be super helpful!

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20 comments

Connor Rupert

•8M

Box 20 with Code AG on your Form K-1 refers to "gross receipts for section 448(c)" - it's basically reporting your partnership's gross receipts for the gross receipts test. This is used to determine which accounting methods your partnership can use. The good news is that for most small partnerships with minimal income like yours, this information is just being reported to you - you don't actually need to do anything with it on your personal return. It's not a taxable item, deduction, or credit that needs special handling. If you're using tax software and it's prompting for an upgrade, you might be able to bypass this by continuing without entering anything for that code. The AGI amount itself doesn't directly impact your personal tax calculation.

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Connor Rupert

•8M

Yes, that's exactly right. Code AG is informational only for most taxpayers. It doesn't require you to report anything on your personal return or fill out additional forms. The partnership is required to provide this information to partners, but it's primarily for the partnership's accounting method requirements. You should be able to skip it or leave it blank in your tax software without any negative consequences. If the software absolutely won't let you proceed without entering something, try contacting their customer support to see if there's a way around the premium upgrade, as this is a fairly simple informational item.

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Molly Hansen

•8M

It analyzes your K-1 and explains what each code means for your personal tax return. For your real estate partnership with complex codes, it would break down each one and tell you if action is needed or if it's just informational. Really helped me understand which items needed attention and which ones were just there for reference. For the second question, it doesn't automatically fill out your forms, but it tells you exactly what to do with each item. I was able to complete my return on the basic version of my tax software after understanding what each code meant. Saved me the $89 upgrade fee my software was pushing.

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Vincent Bimbach

•8M

If you're still having issues understanding your K-1 or need to talk to someone at the IRS about partnership taxation, I'd recommend Claimyr (https://claimyr.com). I was banging my head against the wall trying to get through to the IRS about a similar K-1 issue for weeks. Used their service and got connected to an actual IRS agent in about 20 minutes instead of waiting on hold for hours. You can see how it works here: https://youtu.be/_kiP6q8DX5c The agent explained that most of these codes in Box 20 are just informational and don't impact my personal return. Apparently tax software companies use these "complex" items to upsell their premium packages even when they don't actually require special handling.

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Vincent Bimbach

•8M

It works by navigating the IRS phone system for you and then calling you back when it has an agent on the line. Think of it like having someone wait on hold instead of you. The system keeps trying different pathways through the IRS phone tree until it finds an open line. I was skeptical too, but after wasting hours trying to get through myself, I gave it a shot. They called me back in about 20 minutes with an IRS agent on the line who helped answer my K-1 questions. The agent confirmed most of Box 20 codes are just informational and don't require premium tax software features. Definitely beat my previous record of 2+ hours on hold only to get disconnected.

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Norah Quay

•8M

I need to eat my words. After seeing the comments here, I tried Claimyr for my partnership K-1 question. Got connected to an IRS agent in about 15 minutes after trying for weeks on my own. The agent confirmed that Code AG in Box 20 is just reporting the partnership's gross receipts and doesn't require any special forms or entries on my personal return. Tax software companies use these codes to scare you into expensive upgrades when most small partnership K-1s can be handled with basic software. Saved me the $95 upgrade fee and hours of frustration!

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Leo McDonald

•8M

From one musician to another - I've had similar issues with my band's K-1. We're structured as an LLC taxed as a partnership. Those Box 20 codes are mostly informational. If your income from the barbershop quartet is minimal, you can probably just enter the standard items (income/loss from Box 1, etc.) and ignore most of the codes in Box 20. I'd also recommend looking at Schedule C instead of a partnership for your group if you're not making much money. Might save you a lot of tax headaches in the future.

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Leo McDonald

•8M

It's actually not too complicated to switch. You'd need to formally dissolve the partnership (file a final return with a statement that it's your final year), and then going forward, one member would report all income/expenses on their Schedule C and distribute profits informally. For a small group like yours, it could save a ton of paperwork. Each of you would just report your share of income on your individual returns without the complexity of K-1s. Just make sure you have a written agreement between members about how money is shared, even if you're not a formal partnership for tax purposes. Makes things much simpler come tax time!

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Malik Johnson

•5M

As someone who's dealt with numerous K-1 forms over the years, I can confirm what others have said - Code AG in Box 20 is purely informational and doesn't require any action on your personal return. It's just the partnership reporting gross receipts for Section 448(c) purposes. The frustrating part is how tax software companies exploit these "complex-looking" codes to push expensive upgrades when most small partnerships don't actually need them. For a band with minimal income, you're likely only dealing with the basic income/loss items from Box 1. If you're set on using TurboTax, try continuing without entering the Code AG information - the software should allow you to skip it since it's not a required entry for your personal return. Alternatively, consider switching to a different software that doesn't nickel-and-dime you for standard partnership forms. Also, given that your band barely made money last year, you might want to discuss with your bandmates whether the partnership structure is worth the annual hassle of K-1s and partnership returns. Sometimes simpler is better for small creative ventures.

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Gianni Serpent

•5M

This is really helpful advice! I'm actually in a similar situation with my small creative partnership and have been wondering about the same thing. The annual K-1 paperwork does seem like a lot of hassle for what amounts to very little income. For someone completely new to this - how do you actually go about dissolving a partnership for tax purposes? Do you need to file anything special with the state, or is it just a matter of filing that final partnership return you mentioned? Also, if we do stick with the partnership structure, are there any other Box 20 codes I should watch out for that might actually require action, or are they all generally informational like Code AG?

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