How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask Tax.appeal.168 Your Own Question

Tax.appeal.168
Tax.appeal.168, Tax Accountant
Category: Tax
Satisfied Customers: 2543
Experience:  Nearly 30 years of varied tax industry exp. Tax Biz owner
58285678
Type Your Tax Question Here...
Tax.appeal.168 is online now
A new question is answered every 9 seconds

I live in Missouri and am 16% owner in a LLC/Partnership registered

Resolved Question:

I live in Missouri and am 16% owner in a LLC/Partnership registered in Kansas. 2012 will be it's 2nd year with an operating loss and I have a k-1 from the business. I understand that LLC profits and losses "pass through" to me as an individual and get applied to my personal return and the LLC itself pays (maybe) some limited fees to KS but no real taxes.

My question is whether I should be filing a Kansas state return in addition to my Federal and Missouri returns. Out of curiosity, would the answer be different if this was a LLC registered in MO but does business in Kansas?
Submitted: 1 year ago.
Category: Tax
Expert:  Tax.appeal.168 replied 1 year ago.
Welcome. THANK YOU for choosing Just Answer. My goal is to help make YOUR life, a little...LESS taxing.

Q: My question is whether I should be filing a Kansas state return in addition to my Federal and Missouri returns.

A: Based on the following information, the answer is no, as the LLC did not generate a profit, you do not need to complete a Kansas state tax return. SEE BELOW:


Limited liability companies (LLCs), S corporations, and partnerships (except publicly traded partnerships*) are required to withhold Kansas income tax from a nonresident owner’s share,whether distributed or undistributed, of Kansas taxable income from the LLC, S corporation, or partnership. The nonresident owner withholding rate is 6.45% of the Kansas taxable income.

REFERENCE SOURCE:

http://www.ksrevenue.org/pdf/kw-7-7s.pdf

--------------------------------------------------------------------------

Q: Out of curiosity, would the answer be different if this was a LLC registered in MO but does business in Kansas?

A: No, because the LLC had a NOL. In general, most states tax non residents on income from sources within that particular state.

Please let me know if I can be of further assistance to you regarding this matter.

Thank you again for using JUST ANSWER.
Tax.appeal.168, Tax Accountant
Category: Tax
Satisfied Customers: 2543
Experience: Nearly 30 years of varied tax industry exp. Tax Biz owner
Tax.appeal.168 and 3 other Tax Specialists are ready to help you
Customer: replied 1 year ago.

ok, thanks. I'm afraid I have to ask a couple follow-up questions.


 


1) If I only start filing a KS return when the profit starts, am I going to be able to file on "net" profit (taking into consideration the previous years' unfiled losses)?


 


2) When we are turning a profit, will I be effectively taxed in two states? KS as you are describing and MO as well since the k-1 income will get added to my personal return and presumably taxed in the state in which I live?

Expert:  Tax.appeal.168 replied 1 year ago.

Hello again Chuck,

Q: If I only start filing a KS return when the profit starts, am I going to be able to file on "net" profit (taking into consideration the previous years' unfiled losses)?

A: When your Schedule K-1 shows a profit, this is when you need to be concerned about filing in KS. In my previous response, I referenced a KS state document that should be beneficial for you to look at. Here is the link again;

http://www.ksrevenue.org/pdf/kw-7-7s.pdf

-----------------------------------------------

Q: When we are turning a profit, will I be effectively taxed in two states? KS as you are describing and MO as well since the k-1 income will get added to my personal return and presumably taxed in the state in which I live?

A: Per the referenced KS Department of Revenue document, you will be taxed on Kansas source income, and as you are a resident of MO, you will be taxed as a MO resident. No, there will be no double taxation. What happens is that your home state will credit you for taxes paid to the non-residential state. It might sound a bit confusing, but it all works out in the end if done properly. SEE BELOW:

If you have a rental home or other business in another state, you would be subject to the tax rules and taxes for that other state. Generally, you need to file tax returns in all states where you have business interests that generate taxable income.

 

We recommend you complete the tax return for your home state first, then work on any additional states you may need to file.

 

REFERENCE SOURCE:

 

http://turbotax.intuit.com/support/iq/Multiple-States/I-Have-Questions-About-State-Taxes-in-Multiple-States/GEN83627.html

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
< Last | Next >
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
  • I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight. Bonnie Chesnee, SC
  • Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation. John Minneapolis, MN
  • Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with. Orville Hesperia, California
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex Los Angeles, CA
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP Hesperia, CA
 
 
 

Meet The Experts:

 
 
 
  • Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    570
    10 years experience
< Last | Next >
  • http://ww2.justanswer.com/uploads/KU/KUMI95/2013-9-30_195031_kumar.64x64.jpg Wallstreet Esq.'s Avatar

    Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    570
    10 years experience
  • http://ww2.justanswer.com/uploads/CU/Cuttinggirl/2011-10-29_03719_wcrop2.64x64.jpg Wendy Reed's Avatar

    Wendy Reed

    Enrolled Agent

    Satisfied Customers:

    3052
    15+ years tax preparation and tax advice.
  • http://ww2.justanswer.com/uploads/CATax/2009-08-04_204548_Mark.jpg Mark D's Avatar

    Mark D

    Enrolled Agent

    Satisfied Customers:

    985
    MBA, EA, Specializing in Business and Individual Tax Returns and Issues
  • http://ww2.justanswer.com/uploads/IN/insearchoftheanswer/2013-8-16_0233_attorney.64x64.jpg Richard's Avatar

    Richard

    Tax Attorney

    Satisfied Customers:

    3229
    29 years of experience as a tax, real estate, and business attorney.
  • http://ww2.justanswer.com/uploads/MY/MyVirtualCPA/2012-7-5_44024_cookmegan1.64x64.jpg Megan C's Avatar

    Megan C

    Certified Public Accountant (CPA)

    Satisfied Customers:

    6121
    Licensed CPA, CFE, CMA who teaches accounting courses at Master's Level
  • http://ww2.justanswer.com/uploads/JG/jgordosea/2012-6-7_43138_GordosVeritas.64x64.jpg jgordosea's Avatar

    jgordosea

    Enrolled Agent

    Satisfied Customers:

    2783
    I've prepared all types of taxes since 1987.
  • http://ww2.justanswer.com/uploads/OZ/ozaukeecpa/2012-6-7_193219_Picture1croppedandshrunk.64x64.jpg MequonCPA's Avatar

    MequonCPA

    Certified Public Accountant (CPA)

    Satisfied Customers:

    2231
    CPA, Over 30 yrs experience w/individuals and small businesses. Masters in Tax.