I'm a research scientist in a tech startup company (LLC). I received common share units as employee incentive.
In the K-1 form I received. Box1: Ordinary business income (loss) , there is a net loss.
When i used TurboTax to enter my K-1 form, there is a question asking whether I "materially participated in the partnership's business activity" The answer (Yes/NO) makes a huge difference (several thousand$) in the nonpassive loss amount (reduces taxable income).
If by working hours, I'm definitely over 500 hrs a year. But EasyGuide seems to imply only the higher management who can make big decisions in the company are considered to "participate" in business activities.
There should plenty of people out there who received employee stocks in LLC companies. I wonder how you answered to this question in Turbo Tax.
Thank you!
