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Old 04-14-2016, 11:01 AM
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My S corp receive some distribution from a partnership. How to report it?

Hi,

My S-corp owns some shares of a partnership (LLC). So I received some distribution and a K-1 from the LLC. All of the LLC's income comes from net capital gain. The k-1 shows some numbers on item 8 and 9a (Net capital gain) and some numbers on item 19 (Distribution). My question is where should I report the distribution on my 1020s. Should I report it as item 10 (other income) in schedule k or on schedule d (which item?)?

Thanks a lot.



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Old 04-14-2016, 05:45 PM
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Originally Posted by cheezit View Post
Hi,

My S-corp owns some shares of a partnership (LLC). So I received some distribution and a K-1 from the LLC. All of the LLC's income comes from net capital gain. The k-1 shows some numbers on item 8 and 9a (Net capital gain) and some numbers on item 19 (Distribution). My question is where should I report the distribution on my 1020s. Should I report it as item 10 (other income) in schedule k or on schedule d (which item?)?

Thanks a lot.
I guess it depends;as the S corp is the member of the LLC partnership, then, the corp should be getting the Sch K-1. As you want the S-Corp to be the partner, the llc can transfer your interest in the LLC partnership to the S-Corp.
You were never the partner in LLC partnership, your S-Corp was. How an LLC owned by a S corp gets treated for tax purposes, however, varies depending on how the LLC is treated. For example, if the LLC is only owned by single S corp, the LLC is disregarded if it hasn't made an election to be treated as a corp. That "disregardization" means the LLC's income and deductions just get added to the S corp's other income and deductions. For all practical purposes, the LLC "disappears" as a taxable or tax reporting entity.
If an LLC is owned by several members and the LLC has not made an election to itself be treated as a corp, then the LLC is treated as a partnership. This means that the LLC will prepare and file a partnership tax return. Each of the partners or members in the LLC (including any S corp members) will receive a K-1 from the LLC partnership. And the K-1's income and deductions will be reported on the member's regular tax return.
If an LLC owned by an S corphas made an election to be treated as a corporation, the LLC files a corporation tax return. But the taxes on any LLC income get paid with that return. The S corp's accounting and taxes probably aren't affected by what's happening inside the "LLC taxed as a corporation." Essentially, the "LLC taxed as a corp" is just another "investment" owned by the "parent" corp.
So,An LLC owned by a single S corp could also be treated as a Qualified Subchapter S Subsidiary (also known as a QSUB) if the LLC and the member file the appropriate paperwork and if the LLC had prior to acquiring the S corp member been treated as an S corp. In this case, the QSUB's income and deductions just get reported on the "parent" S corpo's return on 1120S.



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Old 02-24-2017, 07:50 AM
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Thanks for your reply. The LLC is owned by several members and treated as a partnership. They did give us (the S corp) a K-1 form, which shows some ordinary business income, ordinary dividend, net capital gain, distributions and etc. My question is, where should I put all these numbers on my 1120s form? Should I put them on schedule D of form 1120s? But I cannot find a right place on the schedule D. Should I put them on line 5 (other income) or schedule K line 10 (other income)? Totally confused. Please help. Thanks.



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Old 02-24-2017, 08:40 AM
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Originally Posted by cheezit View Post
Thanks for your reply. The LLC is owned by several members and treated as a partnership. They did give us (the S corp) a K-1 form, which shows some ordinary business income, ordinary dividend, net capital gain, distributions and etc. My question is, where should I put all these numbers on my 1120s form? Should I put them on schedule D of form 1120s? But I cannot find a right place on the schedule D. Should I put them on line 5 (other income) or schedule K line 10 (other income)? Totally confused. Please help. Thanks.
The LLC is owned by several members and treated as a partnership. They did give us (the S corp) a K-1 form, which shows some ordinary business income, ordinary dividend, net capital gain, distributions and etc. My question is, where should I put all these numbers on my 1120s form?=====>As said previously, you received a K-1 from the LLC partnership. And the K-1's income and deductions will be reported on your on your regular tax return on SCh E of 1040 / form 1040. The K1 you received and it's reporting on your 1040 form would depend on what information is on the K1 .




Should I put them on schedule D of form 1120s? But I cannot find a right place on the schedule D. Should I put them on line 5 (other income) or schedule K line 10 (other income)? Totally confused. Please help.=========>>as mentioned above.



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Old 02-24-2017, 10:06 AM
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Originally Posted by Wnhough View Post
The LLC is owned by several members and treated as a partnership. They did give us (the S corp) a K-1 form, which shows some ordinary business income, ordinary dividend, net capital gain, distributions and etc. My question is, where should I put all these numbers on my 1120s form?=====>As said previously, you received a K-1 from the LLC partnership. And the K-1's income and deductions will be reported on your on your regular tax return on SCh E of 1040 / form 1040. The K1 you received and it's reporting on your 1040 form would depend on what information is on the K1 .




Should I put them on schedule D of form 1120s? But I cannot find a right place on the schedule D. Should I put them on line 5 (other income) or schedule K line 10 (other income)? Totally confused. Please help.=========>>as mentioned above.

My S corp received the k1, not me. I'm only one of several owners of the S corp. So I guess the K-1's income and deductions should be reported somewhere on the S corp's tax return form 1120s.



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Old 02-24-2017, 10:54 AM
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Originally Posted by cheezit View Post
My S corp received the k1, not me. I'm only one of several owners of the S corp. So I guess the K-1's income and deductions should be reported somewhere on the S corp's tax return form 1120s.
OK I am sorry my bad ; got confused; for example, in the case of CG reported on sch k1 of 1065 from the P/S needs to be reproted on 1120S Sch K as separated item



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Old 02-24-2017, 11:12 AM
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Originally Posted by Wnhough View Post
OK I am sorry my bad ; got confused; for example, in the case of CG reported on sch k1 of 1065 from the P/S needs to be reproted on 1120S Sch K as separated item
Thanks! One more question. Do I need to attach Sch D to the capital gain (loss) item? e.g. line 7 on 1120S Sch K says "Net short-term capital gain (loss) (attach Schedule D (Form 1120S))". If yes, which item on Sch D?



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