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V
vidi
April 7, 2025
Question

SHould LLC issue K1 and also a 1099Misc to its partners?

  • April 7, 2025
  • 1 reply
  • 0 views

LLC, a partnership, in home rental business, issues a K1, with net loss, to its partners that includes al rents received, expenses, and depriciation. Without the depriciation it is positive, so the LLC flows the cash to its partners. Now, should the LLC issue a 1099-Misc as well? If it does 1099-Misc, how should the partners handle it since all the income and expenses are already accounted for in their K1s? 

1 reply

DaveF1006
DaveF1006
April 7, 2025

No, it isn't necessary to to issue a 1099 MISC in addition to the K-1.

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    V
    vidiAuthor
    April 7, 2025

    Thank you.  Without issuing a 1099-Misc, need further clarification, please.

    Amount on K1 Box 1 reflects  (rental income - expenses - depreciation) as a loss.

    Cash, without the depreciation (rental income - expenses) is positive and flown  to the partners be somehow reflected on the K1? How? Thanks

    Rick19744
    Rick19744
    April 7, 2025

    You need to report the cash distributions to the member's on the Schedule K and Schedule K-1 box 19 code A.

    Each member will need to understand how to maintain their tax basis in the investment.

    This worksheet needs to be updated every year for the applicable items on the K-1.

    Partnership tax gets complicated very quickly, so it may be in your best interest to get some professional advice / input.

     

    *A reminder that posts in a forum such as this do not constitute tax advice.Also keep in mind the date of replies, as tax law changes.
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