Discussion:C- Corp with 23 K-1s
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Discussion Forum Index --> Tax Questions --> C- Corp with 23 K-1s
| 4 March 2007 | |
| Any advice on how to handle a C-Corp with a large number of K-1s ( Twenty three)? What additional information should I attach to the 1120? Thanks for your time | |
| 4 March 2007 | |
| How about over a hundred? You've got it easy!! <VBG>
You do not need to attach any "additional information". You merely need to report the corporation's cumulative share of distibutive items on the proper lines of the tax return. Setting up a template would be a start if you want to have support in the workpapers for "at a a glance" review purposes. Your template should mimic the boxes on Sch. K-1; e.g. interest, dividends, ST capital gains & losses, LT capital gains & losses, etc. Don't forget unrecaptured §1250 since corporations have to recharacterize 20% as oridnary income (§291A?). I would not leave out a category merely becasue it does not apply in the current year or may not ever apply to this particular taxpayer. If you set up the template with all boxes it will work for all of your clients and you will only have to modify it when the Service changes the form (as they did in 2004). At the bottom of the template where the totals are, note where each number is reported on the T/R. E.g., Form 4797, Sch D, Form 1120, p1, line 5 (interest), etc. For dividends it makes it especially good because you can create a reconciliation at the bottom for all dividends that qualify for the DRD by adding it to the dividends that the C-corp may recieve on stock it holds directly. As K-1s arrive, you merely open up the spreadsheet and input the amounts. For items like capital gains that go th Sch. D, we merely add a support schedule that does not even report purchase and sale dates, cost or proceeds. We report STCG / STCL / LTCG / LTCL separately. §1231 gain separate from §1231 loss. §1245 recapture, etc. We do not report it by partnership, merely in aggregate. If this is a large corp with mandatory e-filing, then I do not know if the above will work or if you would have to change the report somehow. Although our corp is very large, it does not have to e-file. We probably will once all the kinks are worked out by the ones who are forced to do so. | |
| March 4, 2007 | |
| Senore Gatto, he said a C corp with 23 K-1's. A C corp. Now you stop drinking too. | |
| 4 March 2007 | |
| JR1: I have a C-corp with over a hundred K-1s. What part of my post do you take issue with? Perhaps I was not clear on something? Or perhaps you needed us to specifically type the word "receives"? Come on!! You need to start drinking!!! | |
| 4 March 2007 | |
| JR hadn't yet set his drink down for the night when he wrote that. | |
| 4 March 2007 | |
| Jeshay: Another thing you may want to consider in your template that we have are columns for book income and columns for "tax categories" as well as rows separating US partnerships from foreign partnerships.
Book Income If you add this column next to the column totaling the taxable income, you can add a difference column that is your M-1 (or M-3 if your corp is required to file M-3). Since the M-3 specifically wants income from partnerships detailed separately doing this will help with that form. Tax Categories For clients that are closely-held corps or other entities subject to the passive loss rules, having columns that break up the taxable income by category are very helpful. One column each for Active / Portfolio / Non-PTP Passive / PTP Passive with a total column. This total column can be compared to the other total column to see if any input errors were made. US v Foreign Partnerships The M-3 has separate lines for 1) US partnerships; 2) foreign partnerships; and 3) other flo-thru entities. Segregate the template into these three sections with subtotals for each and a grand total. Again, taking the time now (or after busy-season) to set up the template will save you tons of time in the future. In fact, it will save you so much time you can respond to JR1!!! | |
| 4 March 2007 | |
| JR was raving about pink elephants or something yesterday, maybe that 990-pf got to him..:) | |
| 4 March 2007 | |
| A c corp with k-1??? Sounds a bit tipsy! Are you sure you don't mean an s corp with k-1?
The income from a c corp does not pass to the shareholders. Please explain what you are talking about when you are sober. | |
| 4 March 2007 | |
| If the c corp rec'd k-1s, you report them are income on the appropriate lines of the returns. If you use Proseries, you input each one separately. | |
| 5 March 2007 | |
| I utterly cannot believe that people can get into a thread and not bother reading the responses and then write posts such as "C-corps don't issue K-1s." I could see JR1 mis-reading the initial posts (even though considering the posters the word "receives" should have been pretty obvious).
HOWEVER, (and I do mean caps) when the posters explain that the C-corps RECEIVED K-1s and the explanation of creating templates to record the cumulative distributive share reported on said K-1s is posted as well, then GEEEEEZUS people: READ ALL OF THE GD RESPONSES BEFORE RESPONDING ON YOUR OWN! Or perhaps I am assuming too much tax knowledge on the part of said posters. Therefore, let me pass on some tax knowledge: C-corps are eligible to be partners of partnerships and eligible to be members of LLCs. Therefore, they may receive K-1s from said entities. Now, repeat that until you have it memorized. Sorry - needed to vent. I'm only human. In fact, I'm not even that - I'm only a man. | |
| March 5, 2007 | |
| The word receives didn't appear until your second post...it was Sat. night and I have no reason to believe that the first query was on that, given some of the nuttier posts we've endured! (But kinda hoped that that's what it was...) | |
| 5 March 2007 | |
| Create a spreadsheet for both state and federal. Each state and federal K-1 will get its own column. Break down the revenues and expenses, as well as the seperately stated items. Also have a row for book income(loss). Add back any non-deducatble expenses on the K-1 and, behold, you have your timing differences. Enter these as M-1 adjustments. Let me know if you want me to send you an example. | |
| 5 March 2007 | |
| JR1: Didn't mean to slam you - I see that it does seem that way. I enjoy reading your posts (both those with tax knowledge and those with sarcasm) and knew that you had merely mis-read my post or made the assumption about the OP. Also, I was making allowances since you are a Packers / Golden Domer fan.
I worked 20+ hours this weekend (I know many of you are working more, but I'm in industry, dang it) and when I saw the other oosts after yours AND after I had clarified well . . . I just wish TA had those swords and daggers emoticons someone had mentioned in another thread.
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| March 5, 2007 | |
| LOL! Sorry about being a Packers fan, but even Da Coach couldn't cheer for his old team and as he calls him: satan aka Mike McCaskey, the owner! | |
