Non-Resident State Sales Tax Paid By The Partnership

Our multi-member LLC located in Minnesota has (3) partners, (2) are non-resident, (1) is a resident. The state income taxes are paid by the partnership for the (2) non-residents, a check is written to the state to satisfy their MN income tax. My inclination is this payment on their behalf is a distribution and would reduce their capital position accordingly. So my question:

Is this payment of state income taxes to MN on behalf of the (2) non-resident partners also considered a partner distribution (reflected on their K-1)?

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Non-Resident State Sales Tax Paid By The Partnership

Yes, payments made on behalf of partners are considered distributions of capital and treated accordingly.

Check the IRS publication.

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Non-Resident State Sales Tax Paid By The Partnership

Yes, payments made on behalf of partners are considered distributions of capital and treated accordingly.

Check the IRS publication.

@Anonymous

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

Non-Resident State Sales Tax Paid By The Partnership

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