Client is a 2 person doctor's office formed as a partnership. Partnership is owned by each doctor's PA and each files a 1120S. The partnership makes guaranteed payments and distributions to each partner's PA which becomes revenue to the PA. I understand GPs are not included as QBI income. What about when the GP is paid to the business? Code Z from the S corp K1 didn't separate or indicate any of the S corp revenue was from GP. So when I filed the 1040 I didn't think about the source of any of the QBI.
The prior tax returns were prepared by another firm. For 2018 the partnership's 199A worksheet shows one activity with the NI after deducting the GP, which is $27,277. For the partner's 1120S there are 2 separate activities listed so that netting is used. One activity column shows income of $27,277, which is the partnership OI. The other activity column shows ($69,963) which are the deductions for his 1120S. This excludes the GP paid from the partnership to the PA/S Corp which is $110,400.
I use ProSeries. The 199A worksheet from his 2019 1120S didn't separate the activities so that all the revenue from the partnership was included in the QBI. A total contrast to the prior preparer's method.
Does the GP retain its character even after passing through the S corp? Is this a moot point since the GPs are passed through? Should all payments from the partnership be distributions since the payments are to the PA?
Any help is appreciated. Will keep researching in the meantime.
The prior tax returns were prepared by another firm. For 2018 the partnership's 199A worksheet shows one activity with the NI after deducting the GP, which is $27,277. For the partner's 1120S there are 2 separate activities listed so that netting is used. One activity column shows income of $27,277, which is the partnership OI. The other activity column shows ($69,963) which are the deductions for his 1120S. This excludes the GP paid from the partnership to the PA/S Corp which is $110,400.
I use ProSeries. The 199A worksheet from his 2019 1120S didn't separate the activities so that all the revenue from the partnership was included in the QBI. A total contrast to the prior preparer's method.
Does the GP retain its character even after passing through the S corp? Is this a moot point since the GPs are passed through? Should all payments from the partnership be distributions since the payments are to the PA?
Any help is appreciated. Will keep researching in the meantime.
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