taxlady2008
Level 3
06-12-2020
02:47 PM
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I have an S Corp K-1 (NOT passive) with dividend income on it. The corporation is a service corporation that bought P&G stock which is where the dividend came from. The corp is not in the banking business. I have the boxed check to indicate the K-1 is not subject to net investment tax. Why is the dividend showing up on Form 8960 line 2? The dividend was generated from an active business. Do I need to override this or is it correct and the dividend is still considered net investment income because it is a dividend? Thanks!
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itonewbie
Level 15
06-12-2020
06:09 PM
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Dividends from a pass-through still retain the same character of that income. That's why it's subject to NIIT.
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taxlady2008
Level 3
06-12-2020
08:28 PM
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That makes sense. Thank you!
itonewbie
Level 15
06-12-2020
08:32 PM
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NP, @taxlady2008!
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Still an AllStar
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