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CCH Axcess Tax

Method 5 - Special Allocation Code with Ratios

The special allocation code with ratios method allows you to use the same percentages for many different items without having to list the percentages again for each item. Use Interview Form K-5 along with this interview form for this special allocation method.

The required entries for this method are:

Required Interview Form K-5 Entries

• Ratio ID Number: Enter a unique ratio identification number for each set of ratios entered on Interview Form K-5. This ratio number can be from one to three digits (1 to 994 - ratios 995 through 999 are system-defined ratios). However, if you are using the time segmented allocation method along with this method, use ratio numbers greater than 100. Ratio numbers 1 through 100 are reserved for the time periods on Interview Form K-6 when you are using the time segmented allocation method.
• Partner Number: Identify the partners to receive the ratio allocations. The partner number is a mandatory entry. The partner number entered here must match the partner number entered for that partner on Interview Form K-1.
• Ratios: Enter the set of ratios you are using for special allocations. The ratios in a column are linked to the ratio identification number for that column. This ratio identification number then links the ratios to the special allocation code for the distributive share item on Interview Form K-4.

Required Interview Form K-4 Entries

• Code: Enter the special allocation code assigned to the distributive share item you want allocated using this method.
• Partner Number: Leave the partner number box blank when using this method.
• Activity Number: To allocate information for a single activity, enter the activity number in this box. The allocated amounts appear on the Multiple Activity Statement for that activity and on Schedule K-1. Enter the separate activities on Interview Forms A-1, B-1, D-1, E-1, F-1, O-1, IRS K1F, IRS K1P and Q-1. Refer to the instructions for these other interview forms for more information.
• Oil and Gas Number: If the item being allocated is an oil and gas distributive share item, enter the property number of the item being allocated in this box.
• Ratio ID Number: Enter the ratio identification number from Interview Form K-5 to match the set of ratios on that interview form to the special allocation code on this interview form.

You can also use one of the system-defined ratio ID numbers, 995 through 999, which cannot be entered on Interview Form K-5. Use these codes to reference the following partner percentages that you entered on Interview Form K-1 or that the system computed from your Interview Form K-6 entries (effective ratios):

• Allocation of Above Code: Enter a percentage of the total amount to be allocated or an amount. Do not leave this box blank. If the total amount is to be allocated, enter 100% (1.00) or the entire amount.

Example: Special Allocation Code with Ratios

In this example, both ordinary income and Section 1231 gains are allocated to all partners by ratio ID number 1. Section 754 depreciation is allocated to partner number 3 by ratio ID number 2.