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Hi all,
I have an Illinois resident who formed a Michigan LLC along with two Michigan residents to invest in rental property in MI. In 2020 the profit from the rental is $8,000 of which 50% belongs to the IL resident. MI does not require a tax return for the LLC so my client is going to get a Federal K-1 allocating him $4,000 of income which needs to be reported in MI. However there is no MI K-1 or any reporting to that effect. How would you guys handle this? Proseries only has a module for "Michigan Business Returns" and it does not appear helpful in this context. Thanks for any advice!
Mario
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For additional context since I am preparing the IL resident's 1040 and know all the facts, I will file a MI return reporting his share of the income. But what if he gave the K-1 to a new accountant? How are they supposed to know this is MI income without any reporting to that effect?