Reporting of Pass through K-1 Income/(Loss) from Various State source and state tax obligations

[kumar Bhatt]

Hello Professional Friends (users' of Lacerte Tax Program):

I am looking for a quick guidance on the following unique K-1 Income/(Loss) situation: 

Situation A

Nevada LLC (a pass-through entity) has investment and or has % ownership in AZ LLC, Louisiana LLC

I Want to know- 

a. how to make input of K-1 Income/(Loss) (Federal and State Source income, State w/h, Credit etc.) from AZ LLC, Louisiana LLC (pass through entities) received by Nevada LLC (a pass-through entity)  

b. Nevada LLC "recipient" of K-1 Income/(Loss) (Federal and State Source income) from AZ LLC , Louisiana LLC (pass through entities), is there any tax obligation for Nevada LLC (a pass-through entity) to pay to either of the State (i.e. AZ and Louisiana State)?   

Further, 

Situation B

California LLC (a pass-through entity) has investment and or has % ownership in Nevada LLC mentioned herein above Ref: Situation A

a. how to make input of K-1 Income/(Loss) (Federal and State Source income, State w/h, Credit etc.) from Nevada LLC (pass through entity) received by California LLC (a pass-through entity)  

b. California LLC "recipient" of K-1 Income/(Loss) (Federal and State Source income) from Nevada LLC (pass through entity), is there any tax obligation for California LLC (a pass-through entity) to pay on AZ and Louisiana State source of income?   

Further, 

Situation C

CA State based Grantor Trust (a pass through entity) has investment and or has % ownership in California LLC mentioned herein above Ref: Situation B

a. how to make input of K-1 Income/(Loss) (Federal and State Source income, State w/h, Credit etc.) from California LLC (pass through entity) received by CA State based Grantor Trust (a pass-through entity)  

b. CA State based Grantor Trust "recipient" of K-1 Income/(Loss) (Federal and State Source income) from California LLC (pass through entity), is there any tax obligation for CA based Grantor Trust (a pass-through entity) to pay on AZ and Louisiana State source of income?   

c. Individual Grantor of the Trust (final/ultimate recipient) will be paying Tax on K-1 Income/(Loss) pass through to him from situation A to Situation B and finally to Situation C

Can you please provide some guidance/insights as to reporting requirements and possible tax obligations of Individual Grantor of the Trust (final/ultimate recipient of K-1 Income/(Loss)) from AZ and Louisiana State Ref: Situation A

[PhoebeRoberts]

Time to get out the forms instructions and dig into the state statutes! Yes, your NV and CA entities are going to have to file in AZ and LA. I'd have to read the forms instructions to know for sure whether and at what level one of the entities can file a composite return; if not, the grantor is likely to have a filing requirement in those states, too.

"How do I make Lacerte produce the appropriate output" is a question that can only be determined once you know what output is appropriate. LA allocates pass-through income, but the return itself requires reporting the everywhere income under LA rules and then backing out the pass-through income to be allocated, so you still need to do all the apportionment stuff. I don't know AZ law off the top of my head, but the forms instructions will tell you the basics.