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.
and ex marks the spot where those rocks and anvils hit me.
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.