Welcome back! Ask questions, get answers, and join our large community of tax professionals.
cancel
Showing results for 
Search instead for 
Did you mean: 

S Corp K-1 and QBI calculation for Code V

Highlighted
Level 2
last updated ‎July 30, 2020 3:24 PM

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.

 

   

 

Labels (1)
0 Cheers
1 Solution

Accepted Solutions
Highlighted
Level 15
last updated ‎July 30, 2020 3:24 PM

Just let the software do its thing and don't try to adjust anything.

ex-AllStar, ex-Lutefisk taste taster, ex-ACME product tester
and ex marks the spot where those rocks and anvils hit me.

View solution in original post

7 Replies 7
Highlighted
Level 15
last updated ‎July 30, 2020 3:24 PM

50/50 sounds about 100% right.  Wages for QBI are total wages, not individual shareholder wages.

ex-AllStar, ex-Lutefisk taste taster, ex-ACME product tester
and ex marks the spot where those rocks and anvils hit me.
Highlighted
Level 2
last updated ‎July 30, 2020 3:24 PM

I also read though that Shareholder reasonable compensation are not QBI wages, so do I take the amount off of the Statement A of K-1?

0 Cheers
Highlighted
Level 2
last updated ‎July 30, 2020 3:24 PM
 
 
 

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.  

 

0 Cheers
Highlighted
Level 14
last updated ‎July 30, 2020 3:24 PM

Deleted


ex-AllStar
0 Cheers
Highlighted
Level 2
last updated ‎July 30, 2020 3:24 PM

Please forgive my ignorance, are you saying that I exclude shareholders wages from the 199 A wages or that they should be included in the 199 A wages?  

0 Cheers
Highlighted
Level 15
last updated ‎July 30, 2020 3:24 PM

Just let the software do its thing and don't try to adjust anything.

ex-AllStar, ex-Lutefisk taste taster, ex-ACME product tester
and ex marks the spot where those rocks and anvils hit me.

View solution in original post

Highlighted
Level 2
last updated ‎July 30, 2020 3:24 PM

Thank you. I appreciate you getting back to me!