Correct, you can skip filing Schedule K if any of the following are true:
"Schedule K (568) Only
Disregarded entities – Schedule K is only required to be filed if any of the following is met:
- The income or loss amount reported on Schedule B, line 1 or line 3 through line 11, is $3,000,000 or more.
- The “Total distributive income/payment items,” Schedule K, line 21a, is greater than or equal to $3,000,000 OR less than or equal to $-3,000,000."
Thus, if your income or loss as reported on Schedule B does not meet the thresholds referenced in the above quote, the Schedule K is not required and you do not need to file it. Moreover, as you indicated in your post, you are have included the bank interest on your personal tax return.
The above quoted material was obtained from the CA Franchise Tax Board website at: 2021 Instructions for Form 568 Limited Liability Company Tax Booklet.
@befuddled4
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