​The video below explains how to troubleshoot calculation questions regarding special allocations in Partnership (1065) and S Corporation (1120S) returns using CCH Axcess™ Tax and CCH® ProSystem fx® Tax.

Common Questions When Using Special Allocations

• If an entity is using an activity number then the activity number will need to be used in the federal allocation as well.  However some state allocation codes will need to be allocated without an activity number.
• Some allocation codes can only use percentages instead of amounts.
  • Example: Special Allocation code 5603 - 11f: Other Income %. This code is a percent only allocation code identified by the percentage sign (%) at the end of the description.
• If the total amount or percent does not add up to the item being allocated, then the system will use residual allocation until the entirety of the item is allocated. 
  • If you do not want residual allocation to be done then you will either need to correct your entries or check the box to suppress residual allocation.
• The incorrect special allocation code has been entered for the item and entity type you want to allocate.
  • Example: Section 754 Depreciation in a partnership return has 4 allocations codes. One for each activity type your depreciation schedules are attached to:
    • Code 7609 - Section 754 depreciation attached to Trade or Business activity 
    • Code 7603 - Section 754 depreciation attached to Rental Real Estate activity
    • Code 7605 - Section 754 depreciation attached to Other Rental Activity
    • Code 7607 - Section 754 depreciation attached to Portfolio  
• Due to rounding in the return, the special allocation can produce inconsistent results. This can usually be corrected by selecting the X if units input.

Notes

• If percentages are used, then they will need to be entered as a decimal.
  • Example: For 25%, enter 0.25.
• The number that you are allocating must be present in the return.
  • Special allocation input does not populate numbers within the return. It only serves to allocate a number in a different manner than by the partners profit and loss percentages.
• If your special allocation is not working, sometimes utilizing a Schedule K input override will get the program to allocate.

Additional Information

• For information on entering special allocations in a 1065 return, see our solution on How do I specially allocate items to a specific partner in a partnership return using worksheet view in CCH Axcess™ Tax and CCH® ProSystem fx® Tax?
• For information on entering special allocations in an 1120S return, see our solution on How do I specially allocate items to a specific shareholder in an S Corporation return using worksheet view?