K-1 Questions

Apr 05, 2013 1 Replies
G

Hi,



I have two K-1s for some rental property my sisters and I own. One has "no reportable income" written above Part 1 and Part 3 is blank. The other has the following in Part 3:



1) 0 2) -2480 (net income/loss) 17) A 1136 (AMT) 19) A 3513 (distribution)

Which to I file?



I guessed the second. The AMT added about $400 to our bill even though there is a loss. The AMT is convoluted (I had a question last year) but how do you end up paying taxes on a loss? Why wouldn't the AMT be zero?



Is "distribution" supposed to be the rent we received? If so, it does not remotely match our deposit records.



I don't yet have access to the accountants that did the K-1s.



Thanks, Gary


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R

This sounds strange. It seems that for AMT purposes the income is

-2480+1136, which is still a negative number, so there still be no tax.

Can you ask the people who did the 1065 return to redo it using straight line depreciation (no accelerated depreciation). Bonus depreciation is allowed for rentals and under AMT, but not in many states, so it might be good to exclude it too. If you do this then line 17 will be zero, line 2 will be -2480+1136, still a negative number.

No, distribution is money taken out of the LLC's bank account to give you in order to pay your tax bill or keep members happy. You're already paying tax on your share of all profits the LLC makes.

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