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Schedule VK-1 Owner's Share of Income and Virginia Modifications and Credits

CTC
Level 3

Hello,

Client has Schedule VK-1. He is a non resident of Virginia.

Under Additional Owner Information it says on line f: if owner or entity is exempt from withholding, enter an exemption code. The code is 3.

Distributive or Pro-Rata Income and Deductions

1. Total taxable income amounts

2. Total deductions

Allocation and Apportionment 

4. Income allocated to Virginia (owner's share from PTE's Schedule 502A, Section C, Line 2).

6. Apportionable income (owner's share from PTE's Schedule 502(a), Section C, Line 4.

7. Virginia apportionment percentage (from PTE Schedule 502(A), Section B-percent from Line 1 or Line 2(g), or 100%.

14. Fixed date conformity - depreciation.

18. Total Subtractions (add Lines 14 - 16 and 17a - 17d).

The lines above all have positive numbers and line 4 has "0".

I have been unable to determine where these number should go in ProConnect.

When I called support they couldn't help me but suggested I come here since someone would be able to help.

Thanks,

Melissa

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sjrcpa
Level 15

Then you lucked out. No VA nonresident return is needed.

Resident state may give a credit for tax paid to VA. You will need:

Income taxed in VA

Unified Nonresident tax paid to VA.

These should be on a supplemental statement to the K-1. 


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9 Replies 9
sjrcpa
Level 15

Is the "Owner is Participating in  Unified Nonresident ...Return" box checked?


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CTC
Level 3

Yes.

sjrcpa
Level 15

Then you lucked out. No VA nonresident return is needed.

Resident state may give a credit for tax paid to VA. You will need:

Income taxed in VA

Unified Nonresident tax paid to VA.

These should be on a supplemental statement to the K-1. 


ex-AllStar

View solution in original post

dsocpa
Level 4

I don't work with many LLC's with VA nonresident tax so the Schedule VK-1 has me going in circles.  5% LLC member with 3 k-1’s for activity in MD, DC and VA.

The VA 2020 form 502 VK-1 Schedule has total income from all sources on line 6.

Line 7 VA apportionment % is 6.390081% - from Schedule 502A, Section B… Not sure how the clients share of the VA income is computed?

MD k-1 has line 2 total distributive pro rata share which is the MD income.

VA Sch. VK-1 shows the income earned in total from the federal k-1. I confess in the past this client’s income/losses for the LLC have been minimal to the point I did not file the DC or VA return. Although not a substantial amount the LLC does have income for 2020 and MD and VA k-1’s show tax paid. Specifically, on MD line D 1 and VA line 10.

Client owes quite a bit of tax as the LLC did much better than expected in 2020. I think I have a mental block at this point regarding the VA return. I read over the instructions for the form 502 Sch VK-1 a few times and find the instructions lacking. The total amount is flowing to the VA Activity worksheet in ProSeries which I don't think is accurate but there is no where to enter the apportionment % from line 7.  Should I request the LLC preparer send me the form 502A?

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sjrcpa
Level 15

The VA income is Line 6 times Line 7.


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dsocpa
Level 4

Thank you!

I did try that but the $$ didn't make sense.  Will review again.

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Rich53
Level 1

I have a similar issue.

How do I adjust the amount used for the federal return from form K-1 to reflect the (lower) amount on line 6 of the VA form 502 Schedule K-1?

I completed Schedule VK-1 Worksheet in the Virginia state program and entered the line 6 amount (times the line 7 percentage) in the Distributive or Pro Rata Income section but it made no difference to my VA tax. The amount is material so it should be easy to spot but I do not see the adjustment flowing through to my form 760.

What to do?

Thank you.

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sjrcpa
Level 15

760 is a VA resident return. Your client is taxed in VA on all his K-1 income; not just the VA source income from the K-1.


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Rich53
Level 1

Got it. Thank you!