LLCs filing as a partnerships

[JON]

How do you get the bottom line when an LLC has a small investment in another LLC which has an investment in the first LLC. The partnership investment percentage is about 3%. If you have to do a simultaneous equation I do not think that should be part of a tax practice.??!!!

[jimmcg]

Cash basis or accrual basis?

[JON]

Accrual but

I do not think that makes a difference. 2006 K-1 is picked up on the return no matter if you are cash or accrual.

[Joe Btfsplk]

How do you get the bottom line when an LLC has a small investment in another LLC which has an investment in the first LLC. The partnership investment percentage is about 3%. If you have to do a simultaneous equation I do not think that should be part of a tax practice.??!!!

I don't think it is that complicated. The first LLC would give the second LLC a K-1 which would be part of the second LLC's income and they would give the third LLC a K-1 based on LLC # 3's percent of LLC # 2. You would not need to multiply percentages or calculate the indirect interest in LLC # 1.

[JON]

LLC #1 OWNs

a percentage of LLC #2 and LLC #2 owns a percentage of LLC #1. Which one gives the first K-1???