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I have a client with a single member LLC that had Dividends and I need clarification on reporting

lboydjdd
Level 2

I have a 1040 client with a disregarded LLC that has dividend income to report.  I was wanting the dividend income to show on my Form 568.  Currently one of our data entry people put the 1099 information on Schedule B of the 1040 which does not flow to the 568.  Should it be flowing to the 568 Form?  I was going to try and keep it on the 1040 schedule B and not have it flow to the 540 state return and report on the 568 but I cannot seem to make that happen.  Then I thought I would try to report it on the Schedule C so it could go to the Form 568, but I feel that is not right either.  Can someone please assist on how this should be reported?  

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Karl
Level 4

My understanding (and I could be wrong) is that it's currently treated correctly on your return.  Dividends and interest should not be subject to SE tax, which is what you'd have to do to get them on the 568.  Generally int & div earned in a single-owner unincorporated business are reported on SchB.

If you are concerned about matching gross income 1099's, you can add in the 1099-DIV income in SchC gross receipts and then back it out as an other expense item with the description "int & div reported on 1040 SchB" to spare your client a CP2000 notice.

*If this (or another answer/reply) solves your problem, please click "Accept as Solution" to get this post out of the "Unanswered" queue of posts.*
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