I own part of an LLC that operates as a simple partnership. I recently left the company for gainful employment elsewhere. Am I responsible for the taxes on the company's profits, even if I'm not working for the company and receive no payment from the company?
Hi - my name is XXXXX XXXXX X'X a Business litigation attorney here to assist you.Generally, with an LLC, the profits from the company are passed on to the owners based on the income/profit each owner receives - this is known as pass through taxation. Thus, if you don't receive any profit from the LLC, you shouldn't owe any taxes. Here's a link that outlines pass through taxation - http://www.llc.com/benefits_of_llcs.html
For last year, they submitted the company's taxes showing a ~$15k profit. Supposedly, they split those earnings evenly among the owners (there's 3), which meant that each person's Schedule K-1 had $5k of profit on it. If I did no work with the company and received no money from the company, should my K-1 have been prepared that way?
I'm not an accountant, but if you didn't receive a profit, it shouldn't appear that you did. I would recommend that you consult with your accountant about this.
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