When my father passed away an LLC was set up to receive and distribute his book royalties. I received my first distribution in April of this year, which was from royalties received in 2021. The K1 for 2021 was not prepared/sent until June of 2022 and so I filed for an extension back in April paying tax on the money I knew I received ($1661) The K-1 is odd though. It has amounts in box 7 ($3152); box 13 (code I, $1306); and box 20 (A: $3152; B: $1306; Z: STMT) The STMT just says "Book Royalties" and then restates $3152 Royalties and $1306 Other Deductions. To further complicate matters I received a form 106 showing Colorado based income of $1846 (I live in NY but the LLC is based in CO)
My cut is 6.25% as the royalties, per my father's will, were to be split between 4 siblings (together to receive 25%) and our stepmother (to receive 75%) $3152 represents 6.25% of the royalties. $1661 represents 6.25% of what was left after a deduction to the total was made to cover reimbursement of probate; this is the amount I actually received. I don't understand any of the other numbers though. I also don't understand why the $3152 would be listed as "royalties" on line 7 and again as Investment income on line 20. How is this investment income? Also, how is the $1306 deduction figured?
I'm super confused.
Another $30K in royalties were received about a month ago but the manager of the LLC said no distributions from that can be made until all of the year's expenses are paid.
