K-1 confusion with FreeTaxUSA - how to enter mineral rights income properly?

So a K-1 (Form 1065) can be tricky in any tax software because partnerships report various types of income across multiple boxes. FreeTaxUSA actually handles K-1s pretty well, but it asks for the information in a different sequence than TurboTax. Instead of trying to match boxes directly, go to the "Income" section in FreeTaxUSA, then select "Partnerships, S-Corporations, etc. (K-1)" and follow their guided interview. It will ask for your ownership percentage first, then walk you through each line item. The mineral rights income is probably reported in Box 1 (Ordinary business income) or possibly Box 7 (Royalties) on your K-1. Make sure you enter the EIN for the LLC exactly as it appears on your K-1, along with the correct entity name. If you have any entries in Part III of your K-1 (Partner's Share of Current Year Income, Deductions, Credits, and Other Items), you'll need to enter those individually as the software prompts you.

After struggling with entering my K-1s from several investments last year, I discovered taxr.ai (https://taxr.ai) and it completely changed my tax prep process. The tool scans your tax documents, including K-1s, and automatically identifies exactly where everything should go in your tax software. I had the same issue with FreeTaxUSA not matching my K-1 layouts exactly, especially with mineral rights income and some passive losses. I uploaded my K-1s to taxr.ai and it gave me precise instructions for where to enter each box value in FreeTaxUSA. Saved me hours of frustration and prevented mistakes I would've definitely made trying to match things up myself.

Just coming back to say I tried taxr.ai after seeing the recommendation here, and it was incredibly helpful for my K-1 issues with FreeTaxUSA! I was about ready to switch back to TurboTax out of frustration, but the tool walked me through exactly where to enter each box from my K-1. What surprised me most was how it handled the code "N" items in box 20 of my K-1, which I had no idea what to do with. Turns out those were Section 199A information that needed special treatment, and the tool explained exactly which screens to navigate to in FreeTaxUSA to enter them correctly. My mineral royalties from Box 7 were properly categorized too. Definitely sticking with FreeTaxUSA now that I know how to properly enter these forms!

If you're still struggling with the K-1 or have any questions about your return, I highly recommend using Claimyr (https://claimyr.com) to get through to an actual IRS agent. I had similar issues last year with K-1 entries that I couldn't figure out, and after weeks of trying to call the IRS directly with no success, I tried Claimyr. You can see how it works here: https://youtu.be/_kiP6q8DX5c The service got me connected to an IRS representative in about 15 minutes when I had been trying for days on my own. The agent walked me through exactly how the K-1 mineral rights should be reported and confirmed I was doing it correctly in FreeTaxUSA. Gave me peace of mind that I wasn't messing up my return.

I was super skeptical about Claimyr as you could probably tell from my comment, but I decided to try it out of desperation after spending another hour trying to reach the IRS yesterday. I'm honestly shocked at how well it worked. Got a call back in about 20 minutes, and the IRS agent was able to confirm exactly how I should report my mineral royalties on my K-1. For anyone else dealing with K-1s from mineral rights in FreeTaxUSA: The agent confirmed that royalty income in Box 7 should be entered as portfolio income, and it flows through to Schedule E. The agent also walked me through how to handle the depletion allowance that was listed in Box 13W on my form, which I was completely confused about before. Saved me from giving up and paying H&R Block to figure this out!

I had this exact issue last year! For mineral rights reported on K-1 Box 7, FreeTaxUSA puts this under the "Other Income" section rather than where you might expect. Make sure when you're going through the K-1 entry, you select "Yes" when it asks if you have any portfolio income (interest, dividends, or royalties). Then when it asks for the type of portfolio income, select "Royalties" and enter the amount from Box 7. FreeTaxUSA will automatically put this on the correct line of Schedule E. One thing to watch for: if you also have depletion allowance in Box 13 with code W, make sure you enter that too, as it offsets some of the royalty income.

Has anyone successfully imported K-1s directly into FreeTaxUSA? I know TurboTax has that feature where you can sometimes import partnership K-1s directly if the partnership uses certain accounting software, but I can't figure out if FreeTaxUSA supports this or if manual entry is the only option.

I've been dealing with K-1s from mineral rights partnerships for the past few years in FreeTaxUSA, and I can confirm what others have said about the workflow being different from TurboTax. One tip that really helped me: before you start entering the K-1 data, have your actual form in front of you and go through it line by line to identify which boxes have entries. FreeTaxUSA's interview process jumps around more than TurboTax did. For your $178 in Box 7 royalties, make sure you're not accidentally entering it twice - I made that mistake my first year switching over. Enter it once in the portfolio income section when prompted about royalties, and FreeTaxUSA will handle putting it on the right schedule. The software is actually quite good once you get used to the flow, it's just organized differently than what we're used to from the bigger tax prep companies. Also, keep all your K-1 documentation handy because FreeTaxUSA will ask for the partnership's EIN and address multiple times throughout the process for verification purposes.