tax summary: Schedule K items stated separately; XLSX never shows a wrong amount

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

crates/ledger-core/src/tax.rs

@@ -99,6 +99,8 @@ pub struct TaxCategory {
 
 const ALL: &[TaxForm] = &TaxForm::ALL;
 const CORPS: &[TaxForm] = &[TaxForm::Form1120S, TaxForm::Form1120];
+/// Every return but Schedule C.
+const ENTITIES: &[TaxForm] = &[TaxForm::Form1065, TaxForm::Form1120S, TaxForm::Form1120];
 
 const fn cat(
     key: &'static str,
@@ -144,7 +146,7 @@ pub const CATEGORIES: &[TaxCategory] = &[
         Income,
         ALL,
         100,
-        "Pass-throughs report it separately to owners (portfolio income).",
+        "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.",
     ),
     cat("other_income", "Other income", Income, ALL, 100, ""),
     cat(
@@ -176,9 +178,9 @@ pub const CATEGORIES: &[TaxCategory] = &[
         "charitable_contributions",
         "Charitable contributions",
         Deduction,
-        ALL,
+        ENTITIES,
         100,
-        "Separately stated to owners for partnerships and S corps; limited for C corps; not a Schedule C deduction.",
+        "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.",
     ),
     cat(
         "commissions_fees",
@@ -419,6 +421,12 @@ pub struct TaxSummary {
     pub cost_of_goods: Vec<TaxSummaryLine>,
     /// Deductions.
     pub deductions: Vec<TaxSummaryLine>,
+    /// Items a partnership or S corporation states separately to its owners
+    /// (Schedule K) instead of netting them in ordinary income: portfolio
+    /// interest and charitable contributions (docs/spec/sources/
+    /// irs-tax-lines.md). Not in [`TaxSummary::book_net`] or `tax_net`.
+    #[serde(default)]
+    pub separately_stated: Vec<TaxSummaryLine>,
     /// P&L accounts with activity and no category.
     pub uncategorized: Vec<Uncategorized>,
 }
@@ -497,11 +505,16 @@ pub fn tax_summary(
         income: vec![],
         cost_of_goods: vec![],
         deductions: vec![],
+        separately_stated: vec![],
         uncategorized,
     };
     // Catalog order, so the summary reads like the return.
     for c in CATEGORIES {
         if let Some(line) = by_cat.remove(c.key) {
+            if separately_stated(c.key, form) {
+                out.separately_stated.push(line);
+                continue;
+            }
             match c.kind {
                 TaxKind::Income => out.income.push(line),
                 TaxKind::CostOfGoods => out.cost_of_goods.push(line),
@@ -511,3 +524,13 @@ pub fn tax_summary(
     }
     Ok(out)
 }
+
+/// Whether a partnership or S corporation states this category separately
+/// to its owners (Schedule K) rather than in ordinary income. Form 1065
+/// and 1120-S instructions: Schedule K takes "only taxable portfolio
+/// interest", and "charitable contributions" are among the "items ... must
+/// state separately".
+pub fn separately_stated(key: &str, form: Option<TaxForm>) -> bool {
+    matches!(form, Some(TaxForm::Form1065 | TaxForm::Form1120S))
+        && matches!(key, "interest_income" | "charitable_contributions")
+}

crates/ledger-core/tests/tax.rs

@@ -264,3 +264,81 @@ fn forms_have_their_irs_names() {
         assert_eq!(TaxForm::parse(f.label()), Some(f));
     }
 }
+
+/// A small book with portfolio interest (125) and a donation (300) besides
+/// sales (1,000), for where each lands by return.
+fn interest_and_gift() -> Ledger {
+    let mut l = Ledger::new(Currency::USD);
+    let cash = l
+        .add_account("1000", "Cash", AccountType::Asset, None, false)
+        .unwrap();
+    let mut acct = |code: &str, t, cat: &str| {
+        let id = l.add_account(code, code, t, None, false).unwrap();
+        l.set_account_tax(id, Some(cat), None).unwrap();
+        id
+    };
+    let sales = acct("4000", AccountType::Revenue, "gross_receipts");
+    let interest = acct("4200", AccountType::Revenue, "interest_income");
+    let gift = acct("6900", AccountType::Expense, "charitable_contributions");
+    let usd = |s: &str| Money::new(dec(s), Currency::USD);
+    for (dr, cr, amt) in [
+        (cash, sales, "1000"),
+        (cash, interest, "125"),
+        (gift, cash, "300"),
+    ] {
+        let e = l.create_entry(d(2, 1), "x");
+        l.add_line(e, dr, Side::Debit, usd(amt)).unwrap();
+        l.add_line(e, cr, Side::Credit, usd(amt)).unwrap();
+        l.post_entry(e).unwrap();
+    }
+    l
+}
+
+/// Oracle: 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 ... must state separately": both
+/// leave the ordinary-income net (1,000 here, not 825) and are listed
+/// apart. On Form 1120 they stay in it (lines 5 and 19).
+#[test]
+fn pass_throughs_state_interest_and_gifts_separately() {
+    let l = interest_and_gift();
+    for form in [TaxForm::Form1065, TaxForm::Form1120S] {
+        let ts = tax_summary(&l, d(1, 1), d(12, 31), Some(form)).unwrap();
+        let keys: Vec<&str> = ts
+            .separately_stated
+            .iter()
+            .map(|x| x.category.as_str())
+            .collect();
+        assert_eq!(
+            keys,
+            ["interest_income", "charitable_contributions"],
+            "{form:?}"
+        );
+        assert_eq!(ts.book_net(), dec("1000"), "{form:?}");
+    }
+    let ts = tax_summary(&l, d(1, 1), d(12, 31), Some(TaxForm::Form1120)).unwrap();
+    assert!(ts.separately_stated.is_empty());
+    assert_eq!(ts.book_net(), dec("825"));
+}
+
+/// Oracle: Schedule C instructions, Part V ("Do not include charitable
+/// contributions"): the category is refused for a Schedule C business.
+#[test]
+fn a_sole_proprietor_cannot_deduct_a_gift_on_schedule_c() {
+    assert!(matches!(
+        check_category(
+            "charitable_contributions",
+            AccountType::Expense,
+            Some(TaxForm::ScheduleC)
+        ),
+        Err(LedgerError::InvalidTaxCategory(_))
+    ));
+    assert!(
+        check_category(
+            "charitable_contributions",
+            AccountType::Expense,
+            Some(TaxForm::Form1120)
+        )
+        .is_ok()
+    );
+}

crates/ledger-gui/src/pages/reports.rs

@@ -863,6 +863,13 @@ fn tax(b: &Books, s: NaiveDate, e: NaiveDate) -> Table {
         net,
         vec![Cell::of(ts.book_net()), Cell::of(ts.tax_net())],
     );
+    if !ts.separately_stated.is_empty() {
+        sec(
+            &mut t,
+            "Separately stated to owners (Schedule K)",
+            &ts.separately_stated,
+        );
+    }
     if !ts.uncategorized.is_empty() {
         t.section("Not categorized");
         for u in &ts.uncategorized {

crates/ledger-import/Cargo.toml

@@ -20,3 +20,6 @@ typst-layout = "0.15.1"
 
 [lints]
 workspace = true
+
+[dev-dependencies]
+proptest = "1"

crates/ledger-import/src/report.rs

@@ -460,6 +460,14 @@ pub fn tax_summary(ts: &ledger_core::TaxSummary) -> Statement {
             diff(ts.book_net(), ts.tax_net()),
         ],
     ));
+    if !ts.separately_stated.is_empty() {
+        rows.push(spacer());
+        rows.push(section("Separately stated to owners (Schedule K)"));
+        rows.push(subheading(
+            "Portfolio interest and charitable contributions; not included above:",
+        ));
+        rows.extend(lines(&ts.separately_stated));
+    }
     if !ts.uncategorized.is_empty() {
         rows.push(spacer());
         rows.push(section("Not yet categorized"));

crates/ledger-import/src/xlsx.rs

@@ -138,6 +138,11 @@ fn footer(
     Ok(())
 }
 
+/// Write an amount. A number cell is a binary double and Excel honors 15
+/// significant digits (docs/spec/sources/xlsx-numbers.md), so an amount
+/// with more than 13 digits before the cents can't show exactly: such an
+/// amount is written as its exact text instead, right-aligned, so the
+/// spreadsheet never shows a wrong number.
 fn number(
     sheet: &mut Worksheet,
     row: u32,
@@ -145,7 +150,15 @@ fn number(
     d: Decimal,
     fmt: &Format,
 ) -> Result<(), XlsxError> {
-    sheet.write_number_with_format(row, col, dec_to_f64(d), fmt)?;
+    match exact_f64(d) {
+        Some(x) => sheet.write_number_with_format(row, col, x, fmt)?,
+        None => sheet.write_string_with_format(
+            row,
+            col,
+            crate::report::format_amount(d),
+            &fmt.clone().set_align(rust_xlsxwriter::FormatAlign::Right),
+        )?,
+    };
     Ok(())
 }
 
@@ -369,9 +382,15 @@ fn general_journal(
 }
 
 /// Decimal to f64 at the presentation boundary. Rounded to cents first.
-fn dec_to_f64(d: Decimal) -> f64 {
+/// The double a cell holds for `d`, when Excel will show it exactly: whole
+/// cents, at most 15 significant digits. None otherwise.
+fn exact_f64(d: Decimal) -> Option<f64> {
     use rust_decimal::prelude::ToPrimitive;
-    d.round_dp(2).to_f64().unwrap_or(0.0)
+    let cents = d.round_dp(2);
+    if cents != d || cents.abs() > Decimal::new(999_999_999_999_999, 2) {
+        return None;
+    }
+    cents.to_f64()
 }
 
 #[cfg(test)]
@@ -380,6 +399,27 @@ mod tests {
     use crate::report;
     use ledger_core::reports::{TrialBalance, TrialBalanceLine};
 
+    proptest::proptest! {
+        /// Oracle: docs/spec/sources/xlsx-numbers.md (a cell is a binary
+        /// double; Excel honors 15 significant digits). Every whole-cent
+        /// amount up to 15 digits comes back exactly when shown to the
+        /// cent; anything finer than a cent, or longer, is not written as a
+        /// number at all.
+        #[test]
+        fn a_cent_amount_shows_exactly_or_is_written_as_text(
+            cents in -999_999_999_999_999i64..=999_999_999_999_999,
+            extra in 1i64..10,
+        ) {
+            let d = Decimal::new(cents, 2);
+            let x = exact_f64(d).expect("15 digits fit");
+            proptest::prop_assert_eq!(format!("{x:.2}"), format!("{d:.2}"));
+            proptest::prop_assert!(exact_f64(Decimal::new(cents * 10 + extra, 3)).is_none());
+            let big = Decimal::new(999_999_999_999_999, 2) + Decimal::new(extra, 2);
+            proptest::prop_assert!(exact_f64(big).is_none());
+            proptest::prop_assert!(exact_f64(-big).is_none());
+        }
+    }
+
     #[test]
     fn xlsx_is_a_zip() {
         let tb = TrialBalance {

crates/ledger-mcp/src/server.rs

@@ -3994,6 +3994,7 @@ impl BooksServer {
                 "income": ts.income.iter().map(line).collect::<Vec<_>>(),
                 "cost_of_goods": ts.cost_of_goods.iter().map(line).collect::<Vec<_>>(),
                 "deductions": ts.deductions.iter().map(line).collect::<Vec<_>>(),
+                "separately_stated": ts.separately_stated.iter().map(line).collect::<Vec<_>>(),
                 "uncategorized": ts.uncategorized.iter().map(|u| serde_json::json!({
                     "account": u.account, "book": money(u.book),
                 })).collect::<Vec<_>>(),
@@ -4007,6 +4008,7 @@ impl BooksServer {
             ("income", &ts.income),
             ("cost_of_goods", &ts.cost_of_goods),
             ("deductions", &ts.deductions),
+            ("separately_stated", &ts.separately_stated),
         ] {
             for l in lines {
                 csv.push_str(&format!(