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I have two 50/50 shareholders and only one took compensation. There are no distributions and there is a loss for the year 2019. What should the K-1's look like for Statement A Qualified Business Income, Box 17, Code V?
Currently it is showing the loss split 50/50, with W-2 wages split 50/50 and the qualified property is split 50/50. Is this correct? it is not a specified trade or business. This is my first S Corp in a few years and I am not sure I am understanding how the shareholder comp should show up for Qualified Business Income as I am reading that it should be excluded from Qualified Business Income but only one shareholder took compensation. I appreciate your help.
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50/50 sounds about 100% right. Wages for QBI are total wages, not individual shareholder wages.
Slava Ukraini!
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I also read though that Shareholder reasonable compensation are not QBI wages, so do I take the amount off of the Statement A of K-1?
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I had a diagnostic saying that the tax program assumes that wages are 199 A and if they're not, I need to manually adjust. So since the only wages paid are for one of the two shareholders, I am wondering if since its reasonable comp that it should not show up as wages on statement A of the K-1.
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The more I know the more I don’t know.
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Please forgive my ignorance, are you saying that I exclude shareholders wages from the 199 A wages or that they should be included in the 199 A wages?
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Just let the software do its thing and don't try to adjust anything.
Slava Ukraini!
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Thank you. I appreciate you getting back to me!
