I received an inquiry about an LLC taxed as a partnership, whose only
members are non-citizens/nonresidents. The LLC has had expenses but no revenue.
Does the LLC need to send out K-1s to the members?
When a partnership has no revenue, it's not required to file a Form
1065. So K-1s wouldn't be required either. But if the partnership nevertheless files a 1065 to recognize expenses, are K-1s necessary?
I couldn't find an answer. But my thought would be that the K-1s
wouldn't be necessary in the generic sense, but if they're not issued,
the partners wouldn't be able to recognize those deductions in future
years.
How am I doing? What do you think about how this should be treated?
Thanks.
--
Stu
http://DownToEarthLawyer.com
--A partnership with expenses is required to file its return and issue K-1s. From the instructions:
This email has been checked for viruses by AVG antivirus software. www.avg.com
--
Stuart O. Bronstein wrote:
I received an inquiry about an LLC taxed as a partnership, whoseA partnership with expenses is required to file its return and
only members are non-citizens/nonresidents. The LLC has had
expenses but no revenue.
Does the LLC need to send out K-1s to the members?
When a partnership has no revenue, it's not required to file a
Form 1065. So K-1s wouldn't be required either. But if the
partnership nevertheless files a 1065 to recognize expenses, are
K-1s necessary?
I couldn't find an answer. But my thought would be that the K-1s
wouldn't be necessary in the generic sense, but if they're not
issued, the partners wouldn't be able to recognize those
deductions in future years.
How am I doing? What do you think about how this should be
treated?
issue K-1s. From the instructions:
Except as provided below, every domestic partnership must file
Form 1065, unless it neither receives income nor incurs any
expenditures treated as deductions or credits for federal income
tax purposes.
Stuart O. Bronstein wrote:
I received an inquiry about an LLC taxed as a partnership, whoseA partnership with expenses is required to file its return and
only members are non-citizens/nonresidents. The LLC has had
expenses but no revenue.
Does the LLC need to send out K-1s to the members?
When a partnership has no revenue, it's not required to file a
Form 1065. So K-1s wouldn't be required either. But if the
partnership nevertheless files a 1065 to recognize expenses, are
K-1s necessary?
I couldn't find an answer. But my thought would be that the K-1s
wouldn't be necessary in the generic sense, but if they're not
issued, the partners wouldn't be able to recognize those
deductions in future years.
How am I doing? What do you think about how this should be
treated?
issue K-1s. From the instructions:
Except as provided below, every domestic partnership must file
Form 1065, unless it neither receives income nor incurs any
expenditures treated as deductions or credits for federal income
tax purposes.
ira smilovitz <ira.sm...@gmail.com> wrote:
Stuart O. Bronstein wrote:
I received an inquiry about an LLC taxed as a partnership, whoseA partnership with expenses is required to file its return and
only members are non-citizens/nonresidents. The LLC has had
expenses but no revenue.
Does the LLC need to send out K-1s to the members?
When a partnership has no revenue, it's not required to file a
Form 1065. So K-1s wouldn't be required either. But if the
partnership nevertheless files a 1065 to recognize expenses, are
K-1s necessary?
I couldn't find an answer. But my thought would be that the K-1s
wouldn't be necessary in the generic sense, but if they're not
issued, the partners wouldn't be able to recognize those
deductions in future years.
How am I doing? What do you think about how this should be
treated?
issue K-1s. From the instructions:
Except as provided below, every domestic partnership must fileSo what happens if the LLC files the 1065 and issues K-1s, but the
Form 1065, unless it neither receives income nor incurs any
expenditures treated as deductions or credits for federal income
tax purposes.
foreign partners don't file returns that show a loss? Do they lose
the right to carry those deductions forward? I couldn't find a
financial penalty for doing that.
--
Stu
http://DownToEarthLawyer.com
--
This email has been checked for viruses by AVG antivirus software. www.avg.com
--
| Sysop: | Keyop |
|---|---|
| Location: | Huddersfield, West Yorkshire, UK |
| Users: | 300 |
| Nodes: | 16 (2 / 14) |
| Uptime: | 49:17:42 |
| Calls: | 6,711 |
| Calls today: | 4 |
| Files: | 12,243 |
| Messages: | 5,354,778 |
| Posted today: | 1 |