Someone should have explained to you how passthrough entities work; both S corp and partnerships (and LLC's taxed as a partnership).
These entities do not pay tax (a few exceptions). The income, loss, gains, losses are reported to the shareholder's or partner's (owners) on the K-1. The owners then report the results of the K-1 on their respective form 1040 and either pay the necessary tax or reap the benefit of the losses.
For the reason above, these type of entities have a single level of tax. Typically, passthrough entities pass out a distribution that is estimated to cover any tax liability of the owner. This amount will be reported on the K-1.
These type of entities are attempting to run a business, and like all businesses, need cash to keep the business going, pay salaries, rent, inventory, etc. So it is not possible to invest in a business and expect the business to pay out all the earnings.
Bottom line, how this is reported is exactly how it should be reported. If you are not happy with the investment, you should look into selling the investment. Keep in mind, that the income you are reporting from your K-1, increases your basis in the investment. This is key as when you sell the investment, you are calculating gain on a larger amount than you initially invested. Hopefully you have been tracking your basis.
You don't indicate what type of entity, and I will assume it is a partnership K-1. Take a look at your K-1 line 19A to see if anything is reflected on that line. If the business is generating income they typically, as stated above, distribute out enough cash to help with any tax consequences. If they are not doing this, then ask them when they expect to reach a point of making distributions. If you are not comfortable with their response, consider selling.
*A reminder that posts in a forum such as this do not constitute tax advice.
Also keep in mind the date of replies, as tax law changes.
