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Old 03-28-2018, 09:47 AM
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K-1 amount to report to IRS

This is the first time I received the Schedule K-1 for a stock I bought last year. So last year, the distribution I received from my stock was $10K in box 19A. There are other amounts in other boxes that I'm not sure if I need to report them to the IRS or not.

1. My question is what amount should I report to the IRS? Is it just the amount of $10K?

2. Also do you know the difference between this distribution for K-1 vs Dividends?

Before when I bought stocks, they only report on form 1099 what are my qualified and ordinary dividends and they equal to the amount of dividends I received that year, very simple. This time it's K-1 and there are a lot of numbers on it.

Thanks

I live in California


Last edited by Andy2009 : 03-28-2018 at 09:57 AM.


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Old 03-29-2018, 01:01 AM
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This is the first time I received the Schedule K-1 for a stock I bought last year. So last year, the distribution I received from my stock was $10K in box 19A. There are other amounts in other boxes that I'm not sure if I need to report them to the IRS or not.=========>>it depends; When the owners of a MMLLC receive cash distributions of biz profits, their tax responsibility depends on the biz's own tax status. If the MMLLC is treated as a so-called "pass-through" entity by the IRS, I guess this is yur case, then these distributions don't trigger extra tax. If the IRS treats theMMLLC like a corp, either S- or C corp though, distributions get taxed as corporate dividends.
in general, since you need to report your share of the MMLLC income / loss for the tax year on your 1040 whether or not the income is distributed to you in the same tax year, the amount of your distribution is not usually reported on your 1040 for the year it is distributed.

1. My question is what amount should I report to the IRS? Is it just the amount of $10K?========>>aslongas your biz is an S corp or MMLLC taxed as a S corp, then, In general the distributions paid by an S corp to the S corp shareholders are not taxable to the shareholders. However, Income retains its character as it passes through to the S corp shareholders. For exampleaslongas the S corp did allocate $10k of the S corp profit to you because you're a shareholder, the character of that income matters.If the income is ordinary income, you pay the ordinary income tax rates. But if the income is long-term capital gains or qualified dividends, you pay the lower preferential tax rates ,sometimes 0%, usually 15%, and worst-case 20% , depending on your personal tax bracket I mean.




2. Also do you know the difference between this distribution for K-1 vs Dividends?=======> Neither MMLLC nor a partnership issues dividends, but each does provide its owners with the accumulated income of the business through distributions ;as a member of a MM LLC, you receive distributions of profit, whereas the common shareholders of a corp can receive dividends.so say ypur MMLLC is taxed as a corp then your d/b?d be dividends rather than distributions; members,partners of a LLC/mmllc don?t own shares of stock in the business. Instead, they obtain ownership interests in the LLC/mmllc that entitle them to a certain percentage of business profits, which in most cases is in proportion to the amount of their capital contribution to the biz. Usually,there is never a guarantee that members will receive a distribution each year. However, they always retain a legal claim on their proportionate shares of profits that the LLC fails to distribute.

Before when I bought stocks, they only report on form 1099 what are my qualified and ordinary dividends and they equal to the amount of dividends I received that year, very simple. This time it's K-1 and there are a lot of numbers on it.========>>usually qualified and ordinary dividends and they usually equal to the amount of dividends you received each year; however, they are not added together. Your qualified dividends are subset of your total ordinary dividends. Line 9a of SCh K1 of 1065vis your taxable amount. Line 9b of Sch K1 of 1065 is merely reporting the qualified dividends portion of line 9a.Line 9b is broken out because qualified dividends receive favorable tax treatment equivalent to that on long term capital gains.basiclaly as mentioned previously, as a S corp S/H since Income retains its character as it passes through to the S corp shareholders, If the income of $10K is ordinary income, you pay the ordinary income tax rates.say, you get $125k of income from the S corp,
$50k of ordinary business profits; $50k of long-term capital gains on some investments the S corp sold; $25k of qualified dividends the S corp receives because it owns shares in a C corp.
In this case, you pay ordinary income tax rates, depending on your tax bracket on that first $50kand then the preferential tax rates on the $50kof long-term capital gains, 0% if your tx rate is 15% or lower than 15% and the $25k of qualified dividends.



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Old 03-29-2018, 05:55 PM
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Thanks so much. Yeah the company I bought shares in was set up as a limited partnership so it's a "pass-through" entity.

Attached is a schedule K-1 (form 1065). As you can see it has many numbers on it so I'm not sure what amounts to report to the IRS. This was for 2017 and last year was the first year I hold shares in this company.

Do you mind looking at the picture and explain to me what amounts I should report to the IRS and what tax form I should report those amounts on please?

Thanks

Attached Images
File Type: jpg Schedule K-1 Form 1065.jpg (76.7 KB, 1 views)

Last edited by Andy2009 : 03-30-2018 at 01:43 AM.


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Old 03-30-2018, 07:21 AM
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Quote:
Originally Posted by Andy2009 View Post
Thanks so much. Yeah the company I bought shares in was set up as a limited partnership so it's a "pass-through" entity.

Attached is a schedule K-1 (form 1065). As you can see it has many numbers on it so I'm not sure what amounts to report to the IRS. This was for 2017 and last year was the first year I hold shares in this company.

Do you mind looking at the picture and explain to me what amounts I should report to the IRS and what tax form I should report those amounts on please?

Thanks
sorry I can not tell you all the forms and lines that you need to report all income, CG, loss or etc. I fyou need professional help then youmay contact an IRS Enrolled Agent/ a CPA doingtaxes in your local area for your fed/state returns.as said previously, the Sch K-1 of 1065 reflects a partner?s , your share of income, deductions, credits and other items that you will need to report on your individual tax return (Form 1040);for example, you need to report $5670 on line 5 on SCh K1 of 1065 on your 1040 line 8a and on part 1 of sch B of 1040; Partnerships (including LLCs taxed as partnerships) pass qualified dividend income through to noncorporate partners, then you need to report the amt onyour sch k1 line 6a on your 1040 line 9b, also report the amt on sch k1 line 6b on your 1040 line 9a with sch B;the amt of 36271 on line 9a needs to be reported on 1040 line 13 of 1040 and sch d of 1040 and form 8949;also the amt of 29638 reported on line 19 with the code A needs to be reported on 1040 line 17 with a sch E of 1040;6065 on sch k1 line 20 with code A needs to be reported on your 1040 line 21and on line 4a of form (Form 4952) "
You need to report 784 on sch k1 line 20 with code B on line 5 of form (Form 4952) as Investment Interest Expense Deduction.
The amt of 2009 with Code N is reported on yor 1040 line 17b and need to ATTACH SCH E OF 1040

THE AMT OF 2009 IN Box 13 of sch k1 of 1065 with Code H, you should enter the amount on sch A line 27. deductions are not taken into account in figuring your passive activity loss for the year. Do not enter them on Form 8582
The amt of 784 with Code K , on an attached statement, the partnership will show the type and amount of qualified expenditures to which an election under section 59(e) may apply. The statement will also identify the property for which expenditures were paid or incurred. If there is more than one type of expenditure, the amount of each type will also be listed.
Generally, section 59(e) allows each partner to elect to deduct certain expenses ratably over the number of years in the applicable period rather than deduct the full amount in the current year. Under the election, you may deduct circulation expenditures ratably over a 3 year period. Research and development expenditures and mining exploration and development costs qualify for write-off period of 10 years. Intangible drilling and development costs may be deducted over a 60 month period, beginning with the month in which such costs were paid or incurred.
If you make this election, these items are not treated as adjustments or tax preference items for the purpose of the alternative minimum tax. Thenyou need to make this election on (Form 4562).
Because each partner decides whether to make this election under section 59(e), the partnership cannot provide you with the amount of the adjustment or tax preference item related to the expense. You must decide how to claim the expense on your return and compute the resulting adjustment or tax preference item. As said you need to contact a tax pro in your local area for professional accurate help



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