tax summary: Schedule K items stated separately; XLSX never shows a wrong amount
check / check (push) Canceled after 0s
check / check (push) Canceled after 0s
From the IRS form instructions (now quoted in docs/spec/sources/ irs-tax-lines.md): - On Forms 1065 and 1120-S, Schedule K takes "only taxable portfolio interest", and charitable contributions are among the items the entity "must state separately". The tax summary counted both in ordinary income and deductions; they now go in TaxSummary::separately_stated, outside book_net and tax_net, and the report, MCP export, and viewer list them under "Separately stated to owners (Schedule K)". - Schedule C: "Do not include charitable contributions". The category no longer applies to Schedule C (a sole proprietor's gift is personal, an owner draw). - interest_income's note: interest earned in the business itself is ordinary income (other_income). XLSX: a cell number is a binary double and Excel honors 15 significant digits (Microsoft, "Excel specifications and limits"), so an amount over $9,999,999,999,999.99 or finer than a cent is written as its exact text, right-aligned, instead of a number Excel would show wrong. The old conversion also fell back to 0.0 silently; gone. Property test: every whole-cent amount up to 15 digits round-trips exactly. Co-Authored-By: Claude Opus 5.5 <noreply@anthropic.com> Claude-Session: https://claude.ai/code/session_01GWVo7x3UHw5kwCUaWxiejX
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+1
@@ -3524,6 +3524,7 @@ dependencies = [
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"chrono",
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"csv",
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"ledger-core",
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"proptest",
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"rust_decimal",
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"rust_xlsxwriter",
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"serde",
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@@ -99,6 +99,8 @@ pub struct TaxCategory {
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const ALL: &[TaxForm] = &TaxForm::ALL;
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const CORPS: &[TaxForm] = &[TaxForm::Form1120S, TaxForm::Form1120];
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/// Every return but Schedule C.
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const ENTITIES: &[TaxForm] = &[TaxForm::Form1065, TaxForm::Form1120S, TaxForm::Form1120];
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const fn cat(
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key: &'static str,
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@@ -144,7 +146,7 @@ pub const CATEGORIES: &[TaxCategory] = &[
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Income,
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ALL,
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100,
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"Pass-throughs report it separately to owners (portfolio income).",
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"Portfolio interest: partnerships and S corps state it separately (Schedule K). Interest earned in the business itself (on customer accounts, say) is ordinary income: use other_income.",
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),
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cat("other_income", "Other income", Income, ALL, 100, ""),
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cat(
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@@ -176,9 +178,9 @@ pub const CATEGORIES: &[TaxCategory] = &[
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"charitable_contributions",
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"Charitable contributions",
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Deduction,
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ALL,
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ENTITIES,
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100,
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"Separately stated to owners for partnerships and S corps; limited for C corps; not a Schedule C deduction.",
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"Separately stated to owners for partnerships and S corps (Schedule K); limited for C corps. Not on Schedule C (\"Do not include charitable contributions\"): a sole proprietor's gift is personal, an owner draw.",
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),
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cat(
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"commissions_fees",
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@@ -419,6 +421,12 @@ pub struct TaxSummary {
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pub cost_of_goods: Vec<TaxSummaryLine>,
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/// Deductions.
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pub deductions: Vec<TaxSummaryLine>,
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/// Items a partnership or S corporation states separately to its owners
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/// (Schedule K) instead of netting them in ordinary income: portfolio
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/// interest and charitable contributions (docs/spec/sources/
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/// irs-tax-lines.md). Not in [`TaxSummary::book_net`] or `tax_net`.
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#[serde(default)]
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pub separately_stated: Vec<TaxSummaryLine>,
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/// P&L accounts with activity and no category.
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pub uncategorized: Vec<Uncategorized>,
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}
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@@ -497,11 +505,16 @@ pub fn tax_summary(
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income: vec![],
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cost_of_goods: vec![],
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deductions: vec![],
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separately_stated: vec![],
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uncategorized,
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};
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// Catalog order, so the summary reads like the return.
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for c in CATEGORIES {
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if let Some(line) = by_cat.remove(c.key) {
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if separately_stated(c.key, form) {
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out.separately_stated.push(line);
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continue;
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}
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match c.kind {
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TaxKind::Income => out.income.push(line),
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TaxKind::CostOfGoods => out.cost_of_goods.push(line),
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@@ -511,3 +524,13 @@ pub fn tax_summary(
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}
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Ok(out)
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}
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/// Whether a partnership or S corporation states this category separately
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/// to its owners (Schedule K) rather than in ordinary income. Form 1065
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/// and 1120-S instructions: Schedule K takes "only taxable portfolio
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/// interest", and "charitable contributions" are among the "items ... must
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/// state separately".
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pub fn separately_stated(key: &str, form: Option<TaxForm>) -> bool {
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matches!(form, Some(TaxForm::Form1065 | TaxForm::Form1120S))
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&& matches!(key, "interest_income" | "charitable_contributions")
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}
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@@ -264,3 +264,81 @@ fn forms_have_their_irs_names() {
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assert_eq!(TaxForm::parse(f.label()), Some(f));
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}
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}
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/// A small book with portfolio interest (125) and a donation (300) besides
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/// sales (1,000), for where each lands by return.
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fn interest_and_gift() -> Ledger {
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let mut l = Ledger::new(Currency::USD);
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let cash = l
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.add_account("1000", "Cash", AccountType::Asset, None, false)
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.unwrap();
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let mut acct = |code: &str, t, cat: &str| {
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let id = l.add_account(code, code, t, None, false).unwrap();
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l.set_account_tax(id, Some(cat), None).unwrap();
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id
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};
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let sales = acct("4000", AccountType::Revenue, "gross_receipts");
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let interest = acct("4200", AccountType::Revenue, "interest_income");
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let gift = acct("6900", AccountType::Expense, "charitable_contributions");
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let usd = |s: &str| Money::new(dec(s), Currency::USD);
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for (dr, cr, amt) in [
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(cash, sales, "1000"),
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(cash, interest, "125"),
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(gift, cash, "300"),
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] {
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let e = l.create_entry(d(2, 1), "x");
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l.add_line(e, dr, Side::Debit, usd(amt)).unwrap();
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l.add_line(e, cr, Side::Credit, usd(amt)).unwrap();
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l.post_entry(e).unwrap();
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}
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l
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}
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/// Oracle: docs/spec/sources/irs-tax-lines.md. On Forms 1065 and 1120-S,
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/// Schedule K takes "only taxable portfolio interest", and charitable
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/// contributions are among the "items ... must state separately": both
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/// leave the ordinary-income net (1,000 here, not 825) and are listed
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/// apart. On Form 1120 they stay in it (lines 5 and 19).
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#[test]
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fn pass_throughs_state_interest_and_gifts_separately() {
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let l = interest_and_gift();
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for form in [TaxForm::Form1065, TaxForm::Form1120S] {
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let ts = tax_summary(&l, d(1, 1), d(12, 31), Some(form)).unwrap();
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let keys: Vec<&str> = ts
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.separately_stated
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.iter()
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.map(|x| x.category.as_str())
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.collect();
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assert_eq!(
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keys,
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["interest_income", "charitable_contributions"],
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"{form:?}"
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);
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assert_eq!(ts.book_net(), dec("1000"), "{form:?}");
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}
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let ts = tax_summary(&l, d(1, 1), d(12, 31), Some(TaxForm::Form1120)).unwrap();
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assert!(ts.separately_stated.is_empty());
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assert_eq!(ts.book_net(), dec("825"));
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}
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/// Oracle: Schedule C instructions, Part V ("Do not include charitable
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/// contributions"): the category is refused for a Schedule C business.
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#[test]
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fn a_sole_proprietor_cannot_deduct_a_gift_on_schedule_c() {
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assert!(matches!(
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check_category(
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"charitable_contributions",
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AccountType::Expense,
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Some(TaxForm::ScheduleC)
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),
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Err(LedgerError::InvalidTaxCategory(_))
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));
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assert!(
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check_category(
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"charitable_contributions",
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AccountType::Expense,
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Some(TaxForm::Form1120)
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)
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.is_ok()
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);
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}
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@@ -863,6 +863,13 @@ fn tax(b: &Books, s: NaiveDate, e: NaiveDate) -> Table {
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net,
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vec![Cell::of(ts.book_net()), Cell::of(ts.tax_net())],
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);
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if !ts.separately_stated.is_empty() {
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sec(
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&mut t,
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"Separately stated to owners (Schedule K)",
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&ts.separately_stated,
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);
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}
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if !ts.uncategorized.is_empty() {
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t.section("Not categorized");
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for u in &ts.uncategorized {
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@@ -20,3 +20,6 @@ typst-layout = "0.15.1"
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[lints]
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workspace = true
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[dev-dependencies]
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proptest = "1"
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@@ -460,6 +460,14 @@ pub fn tax_summary(ts: &ledger_core::TaxSummary) -> Statement {
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diff(ts.book_net(), ts.tax_net()),
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],
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));
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if !ts.separately_stated.is_empty() {
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rows.push(spacer());
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rows.push(section("Separately stated to owners (Schedule K)"));
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rows.push(subheading(
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"Portfolio interest and charitable contributions; not included above:",
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));
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rows.extend(lines(&ts.separately_stated));
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}
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if !ts.uncategorized.is_empty() {
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rows.push(spacer());
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rows.push(section("Not yet categorized"));
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@@ -138,6 +138,11 @@ fn footer(
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Ok(())
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}
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/// Write an amount. A number cell is a binary double and Excel honors 15
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/// significant digits (docs/spec/sources/xlsx-numbers.md), so an amount
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/// with more than 13 digits before the cents can't show exactly: such an
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/// amount is written as its exact text instead, right-aligned, so the
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/// spreadsheet never shows a wrong number.
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fn number(
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sheet: &mut Worksheet,
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row: u32,
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@@ -145,7 +150,15 @@ fn number(
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d: Decimal,
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fmt: &Format,
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) -> Result<(), XlsxError> {
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sheet.write_number_with_format(row, col, dec_to_f64(d), fmt)?;
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match exact_f64(d) {
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Some(x) => sheet.write_number_with_format(row, col, x, fmt)?,
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None => sheet.write_string_with_format(
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row,
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col,
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crate::report::format_amount(d),
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&fmt.clone().set_align(rust_xlsxwriter::FormatAlign::Right),
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)?,
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};
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Ok(())
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}
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@@ -369,9 +382,15 @@ fn general_journal(
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}
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/// Decimal to f64 at the presentation boundary. Rounded to cents first.
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fn dec_to_f64(d: Decimal) -> f64 {
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/// The double a cell holds for `d`, when Excel will show it exactly: whole
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/// cents, at most 15 significant digits. None otherwise.
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fn exact_f64(d: Decimal) -> Option<f64> {
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use rust_decimal::prelude::ToPrimitive;
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d.round_dp(2).to_f64().unwrap_or(0.0)
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let cents = d.round_dp(2);
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if cents != d || cents.abs() > Decimal::new(999_999_999_999_999, 2) {
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return None;
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}
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cents.to_f64()
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}
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#[cfg(test)]
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@@ -380,6 +399,27 @@ mod tests {
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use crate::report;
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use ledger_core::reports::{TrialBalance, TrialBalanceLine};
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proptest::proptest! {
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/// Oracle: docs/spec/sources/xlsx-numbers.md (a cell is a binary
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/// double; Excel honors 15 significant digits). Every whole-cent
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/// amount up to 15 digits comes back exactly when shown to the
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/// cent; anything finer than a cent, or longer, is not written as a
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/// number at all.
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#[test]
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fn a_cent_amount_shows_exactly_or_is_written_as_text(
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cents in -999_999_999_999_999i64..=999_999_999_999_999,
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extra in 1i64..10,
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) {
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let d = Decimal::new(cents, 2);
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let x = exact_f64(d).expect("15 digits fit");
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proptest::prop_assert_eq!(format!("{x:.2}"), format!("{d:.2}"));
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proptest::prop_assert!(exact_f64(Decimal::new(cents * 10 + extra, 3)).is_none());
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let big = Decimal::new(999_999_999_999_999, 2) + Decimal::new(extra, 2);
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proptest::prop_assert!(exact_f64(big).is_none());
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proptest::prop_assert!(exact_f64(-big).is_none());
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}
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}
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#[test]
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fn xlsx_is_a_zip() {
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let tb = TrialBalance {
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@@ -3994,6 +3994,7 @@ impl BooksServer {
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"income": ts.income.iter().map(line).collect::<Vec<_>>(),
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"cost_of_goods": ts.cost_of_goods.iter().map(line).collect::<Vec<_>>(),
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"deductions": ts.deductions.iter().map(line).collect::<Vec<_>>(),
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"separately_stated": ts.separately_stated.iter().map(line).collect::<Vec<_>>(),
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"uncategorized": ts.uncategorized.iter().map(|u| serde_json::json!({
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"account": u.account, "book": money(u.book),
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})).collect::<Vec<_>>(),
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@@ -4007,6 +4008,7 @@ impl BooksServer {
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("income", &ts.income),
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("cost_of_goods", &ts.cost_of_goods),
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("deductions", &ts.deductions),
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("separately_stated", &ts.separately_stated),
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] {
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for l in lines {
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csv.push_str(&format!(
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@@ -325,6 +325,31 @@ SHA-256 of the retrieved file (`i1120.pdf`): `49476a6f69a38a0fdb96fea1d66ddc9364
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---
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## Separately stated items on the pass-through returns (Schedule K)
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Source: <https://www.irs.gov/pub/irs-pdf/i1065.pdf>
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Retrieved: 2026-10-13
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SHA-256 of the retrieved file (`i1065.pdf`): `f4a35a24c7abac486908d3610754397a66b2130f0eb425dda897d78a9d91b786`
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**Portfolio income (Form 1065 instructions)**
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> Generally, portfolio income includes all gross income, other than income derived in the ordinary course of a trade or business, that is attributable to interest; dividends; royalties; income from a real estate investment trust (REIT), a regulated investment company (RIC), a REMIC, a common trust fund, a CFC, a QEF, or a cooperative; income from the disposition of property that produces income of a type defined as portfolio income; and income from the disposition of property held for investment.
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**Schedule K, line 5, Interest Income (Form 1065 instructions)**
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> Enter only taxable portfolio interest on this line.
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Source: <https://www.irs.gov/pub/irs-pdf/i1120s.pdf>
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Retrieved: 2026-10-13
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SHA-256 of the retrieved file (`i1120s.pdf`): `eab655cff9226dbc6d80213350bac050009ba90daf621c182d31c541bc62c3f2`
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**Separately stated items (Form 1120-S instructions)**
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> Items the corporation must state separately that require separate computations by the shareholders. Examples include expenses incurred for the production of income instead of in a trade or business, charitable contributions, foreign taxes paid or accrued, intangible drilling and development costs, soil and water conservation expenditures, amortizable basis of reforestation expenditures, and exploration expenditures.
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**Schedule K, line 4, Interest Income (Form 1120-S instructions)**
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> Enter only taxable portfolio interest on this line. Taxable interest is interest from all sources except interest exempt from tax and interest on tax-free covenant bonds.
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## Mapping (wanderbooks, derived)
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**This section is derived, not quoted.** It is wanderbooks' reading of the 2025 forms and instructions above, written 2026-10-13, for the categories in `crates/ledger-core/src/tax.rs`. It is not tax advice; the CPA decides the return. "—" means the category does not apply to that form (per `TaxCategory::forms`). "Not page 1" means the quoted page-1 lines have no place for it; where it goes instead (for example Schedule K) is not quoted in this file and is left to the CPA.
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@@ -333,13 +358,13 @@ SHA-256 of the retrieved file (`i1120.pdf`): `49476a6f69a38a0fdb96fea1d66ddc9364
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|---|---|---|---|---|
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| `gross_receipts` | 1 | 1a | 1a | 1a |
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| `returns_allowances` | 2 | 1b | 1b | 1b |
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| `interest_income` | 6 for interest on notes and accounts receivable (instructions, line 6); other interest not determined here | Not page 1 (separately stated; not quoted) | Not page 1 (not quoted) | 5 |
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| `interest_income` | 6 for interest on notes and accounts receivable (instructions, line 6); other interest not determined here | Not page 1: Schedule K line 5, portfolio interest (quoted above) | Not page 1: Schedule K line 4, portfolio interest (quoted above) | 5 |
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| `other_income` | 6 | 7 | 5 | 10 |
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| `cost_of_goods_sold` | 4 (from Part III, line 42) | 2 | 2 | 2 |
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| `advertising` | 8 | 21 (no advertising line) | 16 | 22 |
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| `bad_debts` | 27b via Part V (no line in Part II; instructions list bad debts under Part V) | 12 | 10 | 15 |
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| `car_truck` | 9 | 21 | 20 | 26 |
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| `charitable_contributions` | Not deductible on Schedule C (Part V: "Do not include charitable contributions") | Not page 1: separately stated (instructions) | Not page 1 (not quoted) | 19 |
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| `charitable_contributions` | Not deductible on Schedule C (Part V: "Do not include charitable contributions") | Not page 1: separately stated (instructions) | Not page 1: separately stated (quoted above) | 19 |
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| `commissions_fees` | 10 | 21 | 20 | 26 |
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| `contract_labor` | 11 | 21 | 20 | 26 |
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| `depreciation` | 13 (tax amount, not book; CPA) | 16a/16c (tax amount; CPA) | 14 (tax amount; CPA) | 20 (tax amount; CPA) |
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